Spotlight Q&A: Charles Hayward, NYRA

By: Sara James

All summer long, Belmont Racetrack hosts almost daily special events for families and fans of all types. New York Racing Association (NYRA), a 501c-3, is the organization that currently oversees the operations at Belmont, as well as Aqueduct and Saratoga. In fact, NYRA has held the franchise over these three thoroughbred racetracks since 1955, despite countless indictments of money-related crimes by employees ranging from the lowest to the highest rungs. Today, NYRA employs 1,000 people directly, with another job in the barn area for each of over 2,000 horses stabled at the downstate tracks. Charles Hayward joined NYRA as President and CEO in November 2004. In addition to the typical, unfathomable, responsibility of heading such a complicated, multi-dimension business, he is billed with reinstating NYRA’s integrity, righting its operational flaws, upgrading infrastructures at all the properties and overseeing the state approved installation of 4,500 video lottery terminals at Aqueduct (which would bring in a projected $650 million of additional revenue per year).

Pulse: What have been your biggest challenges since coming on?
Hayward: NYRA went through bankruptcy and emerged successfully, went through a protracted franchise process and also emerged from that successfully. Getting the VLTs started at Aqueduct remains challenging.

Pulse: What’s the latest with the Video Lottery Terminals (VLTs)?
Hayward: The process for VLTs at Aqueduct has gone through many delays, but seems to be getting back on track again, based on recent developments in Albany. Funds eventually generated by the Aqueduct VLTs will enable us to make significant improvements and upgrades to Belmont Park. The state is also looking into developing a portion of the Belmont Park property commercially, perhaps including a VLT “racino.”

Pulse: What’s new for this year?
Hayward: We think groups will enjoy the new outdoor picnic-style addition called “Top of the Stretch,” which puts the fans trackside for a close-up look at the action… “The Save Your Bucks” deal for the opening month of the 2009 Belmont Park Spring/Summer Meet: Every Wednesday, Thursday and Friday from April 29 through May 29, fans will receive $1 off general parking, admission, beer, soda, hot dogs, hamburgers and pizza.

Pulse: What do you expect the big event(s) to be, in addition to The Belmont Stakes?
Hayward: Surrounding the Belmont Stakes are the great community attractions that make up the Belmont Stakes Festival… Kentucky Derby Day (May 2) and Preakness Day (May 16) simulcasts, added to our live card, as those races set the stage for the Belmont Stakes. On Memorial Day we run one of my favorite races, and one of the country’s top races for older horses, the 116th running of the Shadwell Metropolitan Handicap.

Pulse: How does a tight economy affect betting at the races (up or down)?
Hayward: All forms of wagering and gaming have been adversely affected by economic downturn, but our declines are modest when compared to the casino business and most sectors of the racing business.

Pulse: Spitzer was a critic of NYRA, but in 2007 (as then-Governor), he decided to continue NYRA’s franchises. What changed his mind about NYRA?
Hayward: In 2008 NYRA earned the franchise to operate racing in the state for another 25 years, while the state received title to the track properties valued at over $1 billion. NYRA [has] made a dramatic turnaround from some past practices that had gotten it on Mr. Spitzer’s radar… After problems were uncovered in some basic bookkeeping procedures of our day-to-day pari-mutuel operations, NYRA completely overhauled procedures, trained all clerks in money handling procedures and is now considered the integrity leader in the industry. Our pari-mutuel department is now led by Pat Mahony, recently promoted to Senior Vice President. Pat is the longest serving, most respected executive in the pari-mutuel business.

Pulse: Can you walk us through the process of how the payout happens?
Hayward: In casino gambling the patron bets against the house and the house has the odds stacked in its favor. In the pari-mutuel wagering system at the track, fans essentially bet against each other, with the track holding the stakes. A percentage of the betting pool goes to the State, purses, expenses, the New York Breeding Fund and the rest is distributed to the people holding winning tickets. The betting volume automatically sets the odds—the more people bet on a horse, the lower its odds and potential payoff, the less the bet on a horse, the higher its odds.

Pulse: You launched the NYRA Rewards program in 2007, can you tell us about this?
Hayward: NYRA Rewards, our account wagering program, is a real growth area for NYRA, especially now that it can be used on track, by phone on-line and with mobile devices. The program lets us give cash rebates and other amenities to our best customers. We will open our NYRA Rewards Players Club at Belmont Park his spring for our top-tier members.

Pulse: What percent of NYRA’s total revenue is derived from out-of-state wagering on simulcasting? [Matt – should we say in brackets that out-of-state revenue is tax-free?]
Hayward: Last year about $1.6 billion was bet out-of-state on NYRA races out of a total of $3.4 billion wagered.

Pulse: How responsible is NYRA for the security of the horses?
Hayward: The barn area is a secure area, with a state license required for entry. NYRA instituted a raceday security barn system, which calls for all horses to be sequestered in one secure barn complex six hours before they race. Private vets are not allowed in and the trainers and groom who are allowed in are checked for contraband items. Through the SRWB there is rigorous drug testing after every race.

Pulse: How does Belmont compare to Aqueduct and Saratoga (operationally)?
Hayward: Belmont is our biggest facility and is in operation year round as a training center. It’s a more pastoral track than Aqueduct, without quite the quaint country feel of Saratoga. The operational focus of the Belmont Park spring meet is of course the June 6 Belmont Stakes.

Pulse: Belmont and Aqueduct have both been in need of facility repairs and renovations, have any been done or will be done over the next year?
Hayward: Last year we had significant infrastructure issues at Belmont Park, specifically with our water supply, pressure and plumbing and also with our electrical system. We have invested considerable capital during the off-season to ensure that these problems are well behind us.

Pulse: What are the goals for the future?
Hayward: We want to bring out the very best in Belmont Park, enhance its value as real asset to the region, and strengthen NYRA’s position as premier thoroughbred racing circuit in the nation. Stay tuned.

Quick Stats (sidebar):
Long Island hosting America’s first racetrack in the 1600’s. A quick look at the sport today:
When does the season run: April 29 through July 26
Number of horses per race: averages about 8
Number of races per day: usually 9 or 10
Number of people per day: averages 6,500 to 7,000
Number of people per season: about 400,000
Last year’s total wagers collected: 2008 Belmont Spring–$96,647,954
Average wagered on NY’s thoroughbred races: $3 billion per year (all sources, on and off tracks)