With the opening of the Resorts World Casino atAqueduct Racetrack late last year, the dreams of theNew York racing community through a decade of delays
and unfulfilled promises started tobecome reality. Horsemen have alreadybegun to reap the benefits in the formof dramatically higher purse money andplans for capital improvements at thetracks. Even the weather gods haveshined on the Empire State, harkening
an earlier-than-normal return to grass
racing. With the biggest weekend ofCharles Hayward spring racing at Aqueduct a couple ofweeks away, Charles Hayward, CEO ofAdam Coglianesethe New York Racing Association, tooktime out of his busy schedule for a brief Q&A session
with the TDN.
TDN: What do you see as being the net impact of theAqueduct casino on racing operations on the NYRA
circuit and the state of New York at large?
CH: When it was clear that Genting was signed on andthat the casino was going to open by the end of 2011,
the New York-bred yearling prices in 2011 had anincrease of 46% and the median price was up 67%.
Two-year-olds in training, the average there rose 21%
and the median 25%, all very positive indicators. TheNew York breeders awards, which are the monies paid
to breeders and owners for horses that win and win inopen company as well, that fund is going to increase
from $10 million to $20 million, so that=s going to help
the breeders who have been in a tough spot. So, that=s
all very optimistic. As you know, there have been many
Kentucky outfits that have moved some operations toNew York. For example, Frank Stronach has sent somestallions to Joe McMahon=s farm, Darley has brought astallion to New York (Girolamo) and he=s been booked to120 mares, so obviously there=s a lot of excitement on
the breeding side of things. Obviously, it=s going to be a
few years before those horses race as 2-year-olds, soour foal crop is going to go decline in the short term,
but there=s a significant reversal going forward.
TDN: How have the numbers looked on the racing side?
CH: We started off 2012 very strongly. During themonth of January, we were about flat on handle, but
January is kind of tough getting going--the weather isn=t
great--though we had four cancellations in 2011 andjust one this year. But daily handle has gone up nicely.

One interesting number that we look at is that wehave 12 trainers who made zero starts over the winterin 2011 who made over 10 starts this year, guys like
Dale Romans, Eddie Kenneally and Jason Servis. Bill
Mott never had horses here over the winter, Jimmy
Jerkens left some horses here for the winter and Steve
Klesaris on ship-ins made several starts, so there=s nodoubt that the purses have enhanced their participation.
As far as the purse numbers go, on a daily average, wehad projected Aqueduct purses to be up about 36%-they=re actually up a little over 40% on a daily averagebasis. We see a number of horses coming back now. Onthe racing side, we were obviously able to get Hansen
here for [the GIII Gotham S.]. It was a strong field andwe were thrilled about that. It used to be that once theCigar Mile was done on Thanksgiving weekend, wewent all the way to the Gotham without much
excitement, so doing something like adding in theWithers and the Count Fleet before that helped generatesome enthusiasm and we have the Wood Memorial
coming up. Alpha won the Withers and is now comingback for the Wood, so we=re going to have had plenty oflegitimate 3-year-olds coming through New York.
TDN: Is there any indication that the casino iscannibalizing business away from the racing product?
CH: I know of a few instances where a husband andwife came out here with a couple of kids, for example,
and the father and the kids stayed on the racing sideand the mother went and played the slots for a coupleof hours. I know there was some discussion that whenthe slots came in that it was going to cannibalize us bya certain percentage, but we haven=t seen thatwhatsoever.
TDN: Do you have any comment on the reports that
Genting has a broader plan to build a convention centeron the premises, calling winter racing into question?
CH: We haven=t seen a plan as yet, but what I can say
is that Genting has been a very good neighbor, if youwill. Most companies that build casinos at racetracks-you can=t find the racetrack from the casino, but on
both their first and second floors, they built big patioswith a lot of glass from inside, so you can actually
stand inside the casino and watch the races. On the bigdays, there are probably 300 or 400 people out on thepatios to watch the races, so that=s pretty cool. As weknow from history, there=s not a lot of crossover fromslots players, because that=s one type of gambling
versus another, but there is always a buzz of activity inthe building, a lot more excitement. Genting has been
great, and we=ll see what might happen with theconvention center. It=s important to have winter racing
and we want to assure our horsemen that it=s going tocontinue.
TDN Q&A cont.

TDN: Can you talk about what types of capital
improvements might be in the works and when changes
might be seen?
CH: We have some different timelines. We had nomoney to spend before Aqueduct opened, which wasunfortunate, because we would have liked to do that.
We are going to put $3-$5 million into some cosmetic
things (TVs, paint, new carrels, etc.) in the building and
we are going to spend another $5 million to build what
we would call a state-of-the-art simulcast center, which
will be called Longshots and will operate year-round.
Genting is actually going to pay to build it out since wegave them more space than what was allocated in thelease. That=s just another indication of how good apartner they=ve been. We=ve got a significant capital
expansion program that=s in the works at Saratoga. Not
much is going to be done this year, as it=s in theplanning stages, and we=ve got $3 to $5 million incapital expansion for Belmont as well. We=re hoping tobuild out the first of many new dormitories at Belmont
and do that by the end of the year.
TDN: A few months ago it was learned that NYRA had
essentially been >overcharging= its customers by not
adjusting the takeout on certain wagers. Has there been
any negative residual impact?
CH: It was a really unfortunate situation. What
happened was, when we got the new franchise in2008, the legislature increased the takeout rates acrossthe board on win/place/show, which is one category,
two-horse bets, which is another category, exotics andpick six. They were all moved up a point. We haveranges of takeouts in each of those areas, butunfortunately, with exotics, it was a range of 15 to25% and it went up to 26%. We knew the bill was
sunsetting, but no one knew that the bill had taken itout of the range. Unfortunately, the takeout rate ended
up not matching the law. We did two things. At somepoint, the total >overcharge= was $9 million, but only
$1.2 million of that was with NYRA=s customers, either
on track or NYRA Rewards. Of that $1.2 million, we=veidentified $400,000 of it through NYRA rewards and arein the process of refunding that. Another $100,000 is
identifiable through tax forms. We can=t identify theother customers. We took that 26% and took it down,
not back to 25%, but to 24%. Within the year,
customers will be repaid through lower takeout. No one
was defrauded, but unfortunately it didn=t comply withthe law. We=ve accepted responsibility for it andhopefully we can move on.
TDN: Recently you released the stakes schedule andpurse structure for Belmont and Saratoga. You must befeeling very positive about the announcement.

CH: We are very excited about the purse structure. Themaidens at Belmont are going up to $70,000 and$75,000 at Saratoga. We have reduced the low end of
the claiming ranks. We=re taking the bottom up to$10,000 Apr. 4 and bottom-level claiming at Belmont
will be $14,000 and $20,000 at Saratoga. We=re very
excited about the numbers. Last year at Saratoga, wewere at $670,000 a day and that was highest in thecountry. This year we=re going to be a little over$900,000.
TDN: Switching gears a bit, how do you feel about theTask Force which has been appointed to investigate therecent breakdowns over the inner track?
CH: We are extremely pleased with the panel members-they are all very qualified people. We have two very
accomplished veterinarians. Alan Foreman has been
involved with horsemen's issues for many years andJerry Bailey has remained in the game on thebroadcasting side. My understanding is that they'regoing to be drawing on other experts, racing surface
experts and other vets. We were most recently certified
by the safety and integrity committee in November, so
we are turning over their comprehensive report to them.
It goes through racing surfaces, veterinary protocols andjockey protocols. We are going to be as helpful and astransparent as they would like it to be.
TDN: Is there anything else you=d like to add?
CH: Well, because of the mild weather, we were able toadd a couple of extras to the Wednesday overnight, andwe will be on the turf for the first time this coming
Wednesday. It's always exciting to be on the turf andwe're thrilled to be able to do it so early. It's a great turf
course, but we don't have a lot of time to use it in thespring, so it=s wonderful to get on it so early.