Reproduced below is NYTB Executive Director Jeffrey Cannizzo’s letter which appears in the June edition of the New York Breeder.
Good news has been hard to come by in 2020, to be sure, but I bet every New York breeder and horseman joined me in celebrating Governor Cuomo’s May 16 announcement that live racing can resume state-wide after June 1. The New York Racing Association (NYRA) hasn’t run a card since March 15 at Aqueduct, and officially suspended racing on March 19.
In late April NYRA submitted a proposal to the state requesting permission to resume live racing at Belmont Park. The racetrack operator detailed a host of health and safety protocols for reopening, many of which had already been in place for training and horse care for the duration of the hiatus. NYTB wrote several letters in support of the proposal emphasizing the need to restart the economic engine of the Thoroughbred breeding and racing industries. In addition to various letter campaigns I eagerly participated in numerous lobbying activities involved with various legislators and key staff in the Governor’s office.
Governor Cuomo and other officials, thankfully, recognized that horseracing was uniquely suited to resume operations sooner rather than later. An abbreviated 25-day Belmont spring/summer meet is now on the calendar and scheduled to run from Wednesday, June 3 through Sunday July 12. Racing will be conducted without fans and on June 20 the Grade 1, $1 million, Belmont Stakes will kick off a unique Triple Crown.
Changes on the other side of the 2020 hiatus of racing do not, however, stop at health and safety protocols and shuffled stakes schedules. On June 3, NYRA resumes paying out purses and New York-breds resume earning Program Awards from the New York State Thoroughbred Breeding and Development Fund (the Fund). The industry’s revenue landscape looks completely different.
VLT revenue for purses and awards evaporated the moment the racinos were shuttered in March. In all likelihood the racino at Resorts World will not reopen until the fall (with Delaware North possibly earlier), and then at best at only partial capacity. The absence of patrons at the racetrack for the foreseeable future also means there will no revenue from on-track handle. In fact, the only revenue for purses and awards will come from ADW handle which, for out-of-state customers, pays the industry at a considerably lower rate than on-track handle. The Fund and racetrack operators have had no choice but to revise their 2020 budgets.
NYRA has announced purse reductions and fewer race days for the Belmont spring / summer meet. Following a five-day opening week, live racing at Belmont will be conducted four days a week, (Thursday through Sunday). Open allowance purses are reduced by 20%, New York-bred allowance purses by 15% and claiming purses by 5%.
The Fund, for its part, projects a 44% loss in revenue for the year. After calculating handle and VLT losses and factoring in NYRA’s lower purses and reduced racing days, the Fund’s Audit Committee generated a revised 2020 budget which is now under review by the Fund Board and will almost certainly be ratified by the time you read this.
First and foremost, the Fund is instituting a new withholding model for 2020. As you know, the Fund regularly withholds 10% of each award check during the year to cover any unanticipated revenue shortfall. This makes it possible to reduce everyone’s awards by the same percentage, and not shortchange those who earn awards later in the year. Therefore, effective when racing resumes through the end of 2020, withholding for all award categories will increase from 10% to 50%. Any year-end surplus will be allocated to award earners per existing Fund rules.
The Fund has also reduced purse enrichment for the racetracks for the year by $500,000, allocating $600,000 to NYRA and $400,000 to Finger Lakes. This will result in a downward adjustment of purses for the New York Stallion Stakes Series.
Meanwhile the Fund is imposing substantial cuts on its budgets for administration and promotion. One big-ticket item, the Registry and Award System software enhancements that were slated for 2020 are postponed. The Fund’s professional and legal contracts have also been revised. As part of this belt-tightening process, NYTB also agreed to a reduction of its own promotional contract from the Fund.
I don’t need to remind you that we are all sailing in uncharted waters. We are trying our best to make the wisest decisions we can based on the information we have. Current expectations about the return of racing and re-opening of racinos may well change as events unfold and new data comes in.
I am sure none of us will ever forget the challenges of 2020. Events have forced horsemen, breeders, auction companies and racetrack operators to adapt, innovate and be flexible in order to stay afloat. Let’s hope that some of the hard work and lessons learned will be of service down the road. Racing, breeding and sales will certainly take on more normal contours in 2021 and, with any luck, we and our businesses can emerge as stronger and smarter versions of what they were before.
Thank you Jeff.
You probably won’t get may “likes”
Stay safe.
Margaret