EMPIRE State of Mind by KELSEY RILEY

EMPIRE state of mind by KELSEY RILEY N o one who makes their living in the depressed marketplace. A record president and COO of NYRA. “So if the Thoroughbred industry needs to number of farms are for sale, wagering you start spreading that over 200-plus be reminded that when the world’s on U.S. races has fallen almost 10% ev- racing days, it’s a very, very meaning- economy collapsed in 2008, the Thor- ery year, and U.S. race days are right ful infusion of money, and it really will oughbred industry’s fortunes fell even behind them. put New York on a plateau by itself.” harder. So, when the New York Racing As- Welcome to the ‘new’ New York In the past four years, the foal crop sociation announced video lottery ter- racing and breeding industry, where has fallen 27.3%, tumbling from 34,294 minal-fueled purse increases of almost VLTs at Aqueduct Racetrack in Ozone in 2007 to 24,900 in 2011, and stud fees 40% for its racetracks in 2012, with fur- Park, Queens, are projected to generate followed suit. In the same period of ther increases projected for 2013 and astronomical gains for NYRA and its time, the average price of yearlings 2014, it might not just signal a change three tracks, as well as trainers, own- plunged 27.7%, from $55,300 in 2007 for New York, but for the way the en- ers, breeders and stallion owners, and to just $39,982 in 2010. Breeders left tire industry does business. the state of New York itself. their mares open in droves, unable to “The purse money alone could be in Genting New York, which will op- recoup the investment of a stud fee and excess of $40 million, in new money,” erate the Aqueduct racino under the the cost of bringing a horse to sale in said Hal Handel, the executive vice banner of Resorts World New York Ca- Charles Hayward, NYRA president and CEO / All photos courtesy of Horsephotos 2 Magazine Yearlings NY Bred Getting in a New York State of Mind? Derek MacKenzie Director of Public Sales !UG s&ASIG 4IPTON3ARATOGA3PRINGS)NCLUDING9EARLINGSBY (859) 351-3100 AptitudesCorinthians Deheres First DefencesFlatter Frost Giants Fusaichi Pegasuss Giant’s Causeways Grand Slam Hook and LaddersJump Starts Limehouses Malibu Moon Orientates Performing Magics Pleasantly Perfects Posse Purges Read the Footnotess Salute the Sarge VINERY Silver Trains Smooth Jazz S s A s L s E s S Stonesiders Sunriver Inquiries to: Derek MacKenzie, Director of Public Sales (859) 351-3100 Dan Hayden, Vinery at Sugar Maple (845) 724-3500 www.vinery.com PHOTOS © Equisport & Amy Sword sino, is expecting to install 4,525 VLT for education. The percentages for year machines, with the first flight opening three will be effective through the re- sometime in October and the remain- mainder of Genting’s contract, which is der at year’s end. Genting recently an- 30 years, with a possibility of 10 more nounced that 475 electronic table games years based on performance. would be added to the casino project. While the rest of the industry struggles Once all of the machines are up and to find its footing in the new landscape running, NYRA estimates they will since the global recession, major farms generate $574,875,000 in revenue per are opening or eyeing divisions in New year. This figure is based on the esti- York, and breeders in the Empire State mated $350 per day that NYRA is ex- are preparing for a sea change, as rac- pecting each machine to gross (called ing New York-breds is about to become the win-per-machine figure). Genting as sure a thing as exists in racing. and the state have already written into Numerous Kentucky-based opera- contract a schedule for distribution of tions have expressed interest in getting the revenue, which shows great gains involved in New York with the lure of for the racetracks and breeders. For the newfound revenue. Dr. Tom Simon’s first year of operation (autumn of 2011 Hal Handel, NYRA executive vice president Vinery, a Thoroughbred industry pow- to autumn of 2012), 6.5% of the VLT and COO erhouse with operations in Kentucky, revenues has been allocated to purses. Florida, Australia and New York, is at That works out to over $37 million go- lion) will go to NYRA for their general the forefront of the blue-blooded oper- ing straight into NYRA’s purse account racing operations. In addition, Genting ations that have already expanded, or in the first year, with an increase to 7% will use 8% of the VLT revenue in the are considering expanding, into New for year two and 7.5% in year three. In first year for marketing the Aqueduct York. It started when Vinery moved 2008, NYRA paid a record $122 million racino. their stallion Posse to Empire Stud in in purses between Aqueduct, Belmont The remaining 44% will go the state New York for the 2010 breeding sea- Park and Saratoga, and the number dropped to $100 million in 2010. Ac- cording to NYRA president and CEO Charles Hayward, NYRA has yet to decide how specifically this $37 million will be spread amongst the existing purse structure, but those details should be finalized in a December NYRA board meeting. The New York Thoroughbred Breed- ing and Development Fund will also benefit, with 1% of VLT revenue allocated for year one, and 1.25% and 1.5%, accordingly, in the following two years. For year one, this means an ad- ditional $5.7 million for breeders, an especially significant sum that would erase the deficit that has plagued the breeding fund since 2005. A significant slice of the VLT pie will also go to proactive efforts such as racetrack improvements and marketing of the casino. NYRA is expected to receive $22 million in the first year for capital expenditures (4% of VLT revenue), which will be dedicated to maintaining and upgrading the NYRA racetrack facilities, both frontside and backside. Another 3% (over $17 mil- Vinery New York stallion Posse / Courtesy Vinery July 2011 3 Vinery New York, Sugar Maple Farm son. Posse proved popular among New July looking at the stallions York breeders (he covered 86 mares in we have and the prospects 2010). Sensing major growth on the that are out there and start horizon when the Aqueduct VLT proj- formulating the business ect was finalized in September 2010, model for the next year. Vinery began to shop for property in We’ll start looking at who New York. Later that year, Vinery ex- needs to stay, who needs ecuted a deal to lease Empire Stud and to go, who needs to be moved Purge, who previously stood at improved, and what ac- their Florida satellite, to stand along- quisitions or movements side Posse. A few months later, Vinery can be the best for New added the lease of Sugar Maple stud in York breeders. We think Poughquag, New York, to its Empire the market is going to get State interests, which now total two much, much better, so leased farms (including Empire and we’re aggressively looking Sugar Maple’s existing stallion rosters for good prospects.” Vinery New York stallion Purge of a combined 12 horses), Posse, Purge, Ludt’s sentiments about and a small broodmare band that will the New York Thorough- terrorist attacks. The state’s racetracks expand for 2012. bred scene have been echoed recently got right to work installing VLTs, and by some of the industry’s key players, by 2006, every track in New York, in- “ I just think things are going including representatives of Adena cluding Finger Lakes, was enjoying the to get better and better in Springs, Taylor Made, WinStar Farm benefits of a casino – except the NYRA and Darley. tracks. New York. We’re running It has been a long time coming for This is because NYRA – a not-for- this for the long haul.” New York and NYRA, which has been profit company hired by the state to – Tom Ludt waiting to install VLTs at Aqueduct run Aqueduct, Belmont Park and Sara- for 10 years. It all started back in 2001, toga – was stuck in a state-imposed “Our whole plan is to continue to when the state passed legislation to al- process to select an operator for its ca- improve the quality of pedigree and low New York’s seven harness tracks, sino. First it was MGM Mirage, which the quality of stallion prospects for the as well as Finger Lakes and Aqueduct, was chosen in 2004. After three years New York market,” said Tom Ludt, to install VLTs as a means to boost the of negotiations, that agreement fell president of Vinery. “We will spend economy following the September 11 through in 2007. Next was Delaware 4 Magazine North, who seemed set to proceed un- The Dirt on Racinos til the world economy crashed in 2008 and it was no longer able to build the casino. Then it was Aqueduct Enter- tainment Group, whose term lasted less than two months. The state dis- missed AEG when two of its key part- ners dropped out of the company after allegations that AEG had made illegal contributions to lawmakers trusted with awarding the contract. By that point, many breeders and owners in the state had been burned almost beyond repair. Groups who had purchased land and increased their bloodstock holdings early in the The casino at Gulfstream Park decade in anticipation of casino revenue were forced to downsize consider- ably in order to stay afloat.

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