Over the past few weeks major changes have occurred at NYRA. CEO Charlie Hayward and Senior Vice President Patrick Kehoe were fired as a result of the takeout scandal that cost horseplayers over $8 million. At this point it remains to be seen if there will be any other casualties although one would think there will be.
The first question I have is, with takeout rates being such a hot topic within the horse racing industry, how did it take this long for the issue to come to light? Rumors spread that Daily Racing Form Publisher Steve Crist knew about the situation but he quickly dispelled that and honestly it is hard to believe he, of all people, would standby and take no action considering he focuses the majority of his betting action on the NYRA circuit. At this point it is unknown if Hayward is merely a scapegoat as he was not only defended by Crist but by many other people within the horse racing industry such as Steve Davidowitz and John Veitch.
In either case NYRA has rectified the situation by lowering the takeout rates on those wager types that were above the negotiated limits. While this will not put the money that was incorrectly withheld back into the pockets of horseplayers that wagered on NYRA races in the effected pools it does resolve the issue from this point on. Amid all of this discussion, however, there is one glaring omission that I have yet to read about.
Steve Crist described Charlie Hayward as a friend of the horseplayer in his response to the takeout scandal. He mentioned that Hayward was all for lowering takeout rates but the question is why were the takeout rates skewed toward the higher end of the negotiated ranges? A friend of the horseplayer and champion of lower takeout rates would have surely leaned the other way unless there were unknown forces preventing this from happening. While Crist mentioned political pressure as a reason for the delay in correcting the takeout rates it is unclear if that is the same reason takeout rates were not at the low end of the negotiated ranges.
Win, Place and Show
The Win, Place and Show pools currently have a takeout rate of 16%, which is favorable when compared to race tracks across the country. What most horseplayers are probably unaware of is the negotiated takeout rate range for these pools is 12% to 17%. So while NYRA does offer a favorable takeout rate by comparison it is at the high end of the negotiated range. So the question is why did Hayward not request that the takeout rates be lowered to the minimum of 12%?
Exacta, Quinella and Daily Double
The Exacta, Quinella and Daily Double pools currently have a takeout rate of 18.5%, which are also among the best in the country. The negotiated takeout range is 14% to 21% so again the question is why were the takeout rates not pushed down to the bottom of the range?
Trifecta, Superfecta, Pick 3, Pick 4 and Grand Slam
The Trifecta, Superfecta, Pick 3, Pick 4 and Grand Slam are the pools that were outside of the negotiated takeout rate range. In the past week or so the rates have been dropped from 26% to 24% but unlike in the previous pools this rate is not favorable when compared to the rest of the country. What most horseplayers are unaware of is the negotiated takeout rate range is 15% to 25%. As was the case with the previous examples the takeout rate is at the higher end of the range. While several tracks offer low takeout rates (14% to 15%) on the Pick 4 NYRA chooses not to do so. This again begs the question why would Hayward not push for lower takeout rates?
The Pick 6 currently has a takeout rate of 15% on non-carryover days and 24% (recently reduced from 26%) on days with a Pick 6 carryover. The negotiated takeout range is 15% to 36% so on non-carryover days the takeout rate is at the bare minimum and on carryover days is in the middle of the range. Two questions arise here first why is the takeout rate increased on days with a carryover and second if the rate for the Pick 6 on non-carryover days can be at the minimum of the negotiated range why can’t all of the wagering pools?
Until the dust settles it will remain unclear as to what fault, if any Charlie Hayward had in the NYRA takeout scandal. Based on the positive support he has received by many inside the horse racing industry it is hard to believe he would knowingly defraud horesplayers. Maybe he is guilty or maybe he is a pawn of the political machine in New York city, eventually the truth will come out but all we know at this point is he is no longer leading NYRA and the takeout rate error has been corrected.
The question that will likely not be answered is why does NYRA not offer the lowest takeout rates that they are legally allowed to? While other tracks have lowered takeout rates in recent years, some with great success such as Balmoral Park, and others in the past few weeks or months such as Charles Town and Canterbury Downs why is NYRA taking no action?
The NYRA circuit is arguably the best horse racing circuit in the country and with an increased purse structure funded by the Aqueduct Racino the racing figures to continue to separate itself from the competition. What better way to say thank you to the horseplayers from around the country that have made NYRA what is today then by lowering takeout rates across the board? NYRA has been an industry leader in many ways, such as being the last to legalize race day Lasix, but in the case of takeout rates it is lagging far behind.
Creative Commons photo courtesy of bobistraveling