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NYRA made a financial rebound in 2021 backed by a handful of records

ALBANY — After a slump in 2020, New York Racing Association revenue rebounded last year, boosted by a return to in-person attendance at race tracks, record betting and a deal with Fox Sports, according to the financial statements of the non-profit organization. Part of the increase comes from one-time revenues and cost savings.

NYRA’s 2021 financials, obtained by The Times Union, show the nonprofit’s revenue from pari-mutuel betting (the term meaning when all bets of a particular type are placed together in a pool ) rebounded above 2019 levels in 2021. Meanwhile, NYRA spent more on purses and stakes in 2021 than in the previous six years.

“We had a record year for management, a record for the year, the highest on record,” said Renee Postel, NYRA’s chief financial officer. The handle refers to the amount of money wagered.

Due to the pandemic, Aqueduct Racetrack, Belmont Park and Saratoga Race Course, the three state-owned tracks operated by NYRA, were closed to spectators from March 2020 through May 2021.

But with the return of spectators to Saratoga in July, the Saratoga meet reached a record $815.5 million, surpassing the previous record of $705.3 million set in 2019. In total in 2021, the races of NYRA generated $2.9 billion in total management, financial statements show, the highest since NYRA emerged from bankruptcy in 2008.

With the tracks closed to spectators for part of the year, NYRA saved money on the costs typically associated with catering to in-person fans, while still earning revenue from mobile betting, which it says financial statements, are the organization’s biggest source of bets.

NYRA launched its own mobile betting platform NYRA Bets in 2016, and since then the platform has become a growing segment of NYRA’s overall business. NYRA Bets is available to bettors in 31 states.

“The racing industry is increasingly being done online. Distribution is shifting from the majority of people going to the track or to a local OTB to place a bet – they’re going to bet it on their phone,” said the CEO and President Dave O’ Rourke in an interview. “Part of our bet is that that changes again; it has gone from (advance deposit betting) as a pure place where you bet on horse racing to an integrated solution, we believe, with the sport in the future. close. And we’re trying to position the company for that.”

In 2021, NYRA sold a 25% stake in NYRA Bets to Fox Sports. Under the deal, Fox would broadcast at least 700 hours a year from Belmont Park and the Saratoga Racetrack. NYRA’s financials show the deal generated $9.25 million in one-time revenue for the organization in 2021. Fox has the option to increase its minority stake in NYRA Bets in the future, the report said. NYRA spokesman Patrick McKenna.

NYRA also reduced its compensation and benefits expenditures in 2021 compared to 2019. The number of full-time employees on NYRA staff fell from 816 at the end of 2020 to 769 at the end of 2021, McKenna said, due to retirements and the transfer of some full-time workers to seasonal workers.

The NYRA laid off and furloughed 469 employees, putting about half of the organization’s full-time staff out of work, in early 2020 when the pandemic hit, the NYRA told the Times Union in October. Many of these workers returned to work during 2020.

The organization also employs many part-time and seasonal workers. McKenna said total employment, including those workers, fell from 1,149 in 2020 to 1,256 in 2021.

NYRA received a $10 million loan from the federal government’s Paycheck Protection Program to help it keep workers employed during the pandemic and that loan has been fully forgiven, according to the organization’s financial statements. non-profit.

O’Rourke said NYRA is changing the way it employs workers to match the realignment of its business as many customers move away from track betting to mobile betting and watching races on TV and online. . Renee Postel, NYRA’s chief financial officer, said NYRA was having trouble filling Saratoga jobs in 2021 and held a job fair for Saratoga last week — the earliest ever — due to the competition for workers.

Opening day for racing at Saratoga Racetrack is July 14.

The horse racing industry receives many financial benefits from the state government. Under an agreement with the state, NYRA receives a portion of the revenue generated from Video Lottery Terminals, or VLTs, under a 2008 agreement in which NYRA transferred ownership of Aqueduct, Belmont and Saratoga to the State and the State bailed out NYRA from bankruptcy. . The NYRA pays out some of that VLT income to cover purses – winnings in horse racing – and some is to cover capital expenditures.

NYRA’s 2021 financial statements show the nonprofit continues to rely on this VLT revenue to offset its annual operating losses, as calculated using generally accepted accounting principles (GAAP). , which are widely used accounting standards. NYRA’s operating loss in 2021 was the lowest in six years, at $45 million under GAAP, according to the financial statements.

The New York State Comptroller, which audits NYRA, recommended the nonprofit use GAAP measures to report its financial health and chastised the organization for using alternative presentations.

Postel explained that NYRA prefers to use a non-GAAP financial measure of its operating profit or loss because the measure eliminates from consideration VLT revenue and VLT exchange expenses, depreciation of state and pension costs and other benefits that NYRA accrued prior to its bankruptcy. By that measure, NYRA had an operating profit of $29 million in 2021 and an operating loss of $3 million in 2020, according to the financial statements.

The GAAP measure “shows NYRA’s ability or inability to continue operating on its own after this agreement ends in 2033,” said Kathleen Enget, assistant professor of accounting and law at the University of Albany School of Business, who reviewed NYRA’s financial statements. “They’re going to hurt.”

NYRA again did not pay franchise fees to the state in 2021 because its budgeted expenses in December exceeded its operating cash flow, according to the 2021 financial statements. NYRA never paid fees franchise to the state since the signing of the 2008 agreement, according to the state.

NYRA’s long-term plan is to end races at Aqueduct and consolidate races downstate at Belmont to save overhead, O’Rourke said. In preparation, NYRA is upgrading the Belmont Park facility. The majority of spending and construction to add a tunnel to the track’s unused 55-acre infield at Belmont will take place in 2022, McKenna said.

NYRA is seeking approval from the state legislature to obtain $450 million in state-guaranteed bonds to support construction and says it will use its VLT revenue to cover future interest costs. The NYRA lobbied to include this measure in the state budget, but failed to make the final version.

In the budget, NYRA secured new language ensuring the organization will continue to receive VLT support at 2019 levels, even as the state adds new casinos downstate.

NYRA’s financial statements do not include vendor-level details on expenditures. In a 2022 audit, state comptroller Thomas DiNapoli found NYRA spent money “lavishly,” without proper oversight, and violated tenders and other purchasing rules these last years.

McKenna, the NYRA spokesperson, called the audit “inflammatory” and said it “constitutes a characterization error to challenge a procurement process that is effectively controlled internally by NYRA and in external by the New York State Franchise Oversight Board”.

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