Ordinarily, I try to be a skeptic without becoming a
cynic. The folks I live with like me better that way. Maintaining this stance
with regard to the New York Racing Association (NYRA) and The Daily Racing Form
(DRF) is getting harder and harder.
A couple of weeks ago, while reading The Paulick
Report (http://www.paulickreport.com/)
I came across a press release written by Dan Silver of NYRA which announced
that the attendance at Aqueduct was up on April 7, the day of the Wood
Memorial. I was skeptical about this because I was at Aqueduct that day. I did
not have to buy a ticket, there was no paid admission, and I did not pass
through any kind of turnstile. I wondered how NYRA came up with the statement, "This year’s attendance of 12,514 was a 3 percent
increase from last year’s attendance of 12,144.”
I wrote to Silver and asked about the
number. He replied a couple of days later (after some prompting) and said, “Per
our Director of Admissions, ‘Yes, we can estimate the attendance within 3
percent for live racing days. We use the daily percent of Post Parade programs
sold to calculate Aqueduct’s attendance.’"
This struck me as a little thin and I wrote to Jerry
Davis of NYRA with some follow-up questions about his methodology.
“It seems from what Dan
says that you believe there is a linear relationship between the number of
programs sold and the number of people at the track. That is, for every X
(number of programs sold) there is a corresponding Y (number of people at the
track.)
Is the relationship really linear (not
geometric or something else)? Have
you tested it?
Is it the same relationship on weekends
and weekdays?
Is it the same relationship on big stakes
days as on ordinary days?
Do you ever run out of programs? NYRA ran
out of food in the deli and reportedly out of beer cups by the time of the Wood
last Saturday.
Did you always estimate attendance that
way or did you change when the casino opened?
Does the casino action affect track
attendance? In a way you have measured?
Do you also estimate at Belmont and
Saratoga where NYRA charges admission?
I just want to make sure I understand as
much as I can before I go forward.
Thanks in advance.”
Davis did not choose to get back to me, so I was left
thinking that at best NYRA uses a pretty poor estimating procedure, and at
worst, they just make it up. Reporting an exact number to the public is not the
same as calculating an estimate.
I looked around to see where else this “number”
appeared. These things always used to appear at the end of the Equibase
official charts of the races at each track, but do not any longer. I asked
Equibase about this and they did not reply. I wrote to Brisnet, another
supplier of data and analysis for horse races and asked where they got the
number they printed in their results charts for Aqueduct that day. They got
back to me and told me they got it from NYRA. I wrote to DRF and they told me
they were forwarding my question to “editorial” for review.
So far, no answer from them.
Well, so what. Who really cares how many people went
to the track that day? Maybe the NYRA marketing department does, or the folks
who needed to order enough plastic cups for beer, but what’s the difference to
the rest of us? Something in me did not want to let this rest. My feeling was
that if I could not trust NYRA on something like this, maybe I could not trust
them on things that really count. I was dissuaded from blogging about this by
the feeling I would just come across as a sorehead (something I have been
accused of before). After all, I only go to the NYRA tracks a half dozen times
per year, my wagering is simple and very modest, and I lose more than I win. No
skin off my nose.
Then came the revelations of the last few days.
At the Paulick Report I saw an article about a recent
report titled,
STATE OF NEW YORK RACING AND WAGERING BOARD
INTERIM REPORT INTO THE MATTER OF INCORRECT TAKEOUT
RATES AT THE NEW YORK RACING ASSOCIATION, INC.
Audits and Investigations Unit April 26, 2012
The report details the State’s inquiry into a
situation already known to careful followers of thoroughbred racing. I first
became aware of this some months ago. The specifics are pretty arcane, but to simplify,
the “takeout” is the overhead each racetrack takes out of the money wagered on
the races. This goes to pay for track operations, purses to the winners,
payments to the state and the like. The percentage of each betting pool that
the track “takes out” of what it pays the winning bettors is set by regulation
in each jurisdiction, and typically varies by type of wager. The rest gets paid
to the winners. The size and variability of the takeout from place to place and
from wager to wager is a matter of fierce debate among some who wager on horse
races. Bettors REALLY care how much return they are getting on their
speculative investment.
The regulation in New York had a sunset provision
affecting “exotic” wagers like trifectas and Pick Fours. After the middle of
September 2010, without a change in the sunset provision, NYRA would take less
and the winning bettors would get more. Given the size of NYRA’s operation and
the fierce loyalty bettors have to their own money, any swing is important. In
this case, the total amount that went to NYRA and not to the bettors was almost
$8.5 million.
The report, which can be found in full at
says in part
“The Board’s review thus far has found the following:
Based on a review of NYRA’s emails, several NYRA personnel,
including CEO Charles Hayward, were notified and/or were aware that the exotic
takeout rate had expired. NYRA may not have lowered the rates due to perceived
political and financial reasons. In an email dated September 1, 2010 NYRA Vice-President
Liz Bracken informed a NYRA Manager that, “takeout legislation sunsets middle
of September, but I have not heard that we intend to lower takeouts.”
The email was subsequently forwarded to two other
NYRA employees.
Mr. Hayward was notified via email by a concerned
bettor on September 28, 2010 that the law had sunset and the rates had expired.
Mr. Hayward notified the bettor that he was
referring the issue to NYRA’s General Counsel Patrick
Kehoe.”
And later,
“In August 2011 (almost a year after the rates had
expired) the Daily Racing Form (DRF) publisher and columnist Steve Crist passed
along an email from a DRF reader indicating the rates had expired and were
outside the parameters of the Racing Law. Mr. Hayward emailed Mr. Crist on
August 1, 2011 confirming that the reader was correct and requested that Mr.
Crist keep the information confidential. Mr. Crist agreed.”
Read that last sentence again.
The publisher of the biggest American newspaper
devoted to horse racing agreed not only to keep silent about NYRA’s defrauding
of the public at large, but also to abet that fraud being perpetrated against
one of his own subscribers.
The Paulick Report (May 1, 2012) has an item in which
it reports,
“Crist and Hayward are former business partners who
in 1998 put together an investment group to buy Daily Racing Form. They sold it
six years later for a tidy profit. Crist remained with the newspaper as
publisher and columnist, and shortly after the Form was sold Hayward was named
CEO of NYRA, where Crist was employed as an executive in the mid-1990s. The
friendship between the two men has spawned a cozy relationship between the
newspaper and the racing association it covers.”
“Cozy”? That does not begin to describe the way I
feel about the relationship between Crist/DRF, and NYRA.
As of today things stand this way -
NYRA has sanctioned Hayward and Kehoe by placing them
on unpaid administrative leave.
Crist says “With hindsight, I regret that I didn’t
follow up on the issue. But I personally do not believe Hayward knowingly overcharged
his customers….”
The big bettors who use internet betting sites have
mostly gotten their money back because they had an electronic trail of the bets
and the payouts.
The ordinary guy, pushing his $10 bill through the mutuel
window?
Nothing.
And no way to ever recoup.
Occupy Wall Street? How about Occupy Saratoga? Years
ago, the late Tom Ainslie wrote “This is a game that punishes innocence.” It
was not the only thing he had right, but it is the thing that is on my mind
today.
