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Editorial: Run the old NYRA out of town

Jockey John Velazquez, right, drives Union Rags past

Jockey John Velazquez, right, drives Union Rags past Paynter and jockey Mike Smith, left, to the finish line for victory in the Belmont Stakes horse race at Belmont Park in Elmont, N.Y. (June 9, 2012) Credit: AP

For the next three years, the New York Racing Association will be run by the NYRA Reorganization Board, an entity Gov. Andrew M. Cuomo is creating to deal with the disaster that is NYRA. By the end of that three years, a mechanism for overseeing racing at the three state-owned horse tracks must be adopted that prevents administrative abuses and protects horses. In other words, it must be nothing like the NYRA the state has known until now.

In the past decade NYRA faced a tax fraud indictment, which was dropped after the association agreed to reform. NYRA faced bankruptcy, but avoided it after a $100-million bailout from the state, in return for dropping the dubious legal claim that the private, not-for-profit corporation owned Aqueduct, Belmont and Saratoga racetracks. Earlier this year, it was discovered that NYRA was stealing by underpaying winners of certain exotic wagers. That cost NYRA bettors more than $1 million, and OTB bettors another $7 million, because NYRA sets all payouts for its three tracks. That got NYRA chief executive Charles Hayward and its chief counsel, Peter Kehoe, both of whom were earning salaries in excess of $400,000, ousted.

NYRA, with its 1,400 employees, was often in financial trouble until it started getting video lottery terminal money from Aqueduct last year. Now, its finances have stabilized, but the new money hasn't changed the dysfunction.

Even more troubling has been NYRA's failure to protect horses. This past winter, horses died at Aqueduct at an alarming rate. In total, 21 thoroughbreds died from injuries suffered while racing, a rate about twice the national average. A study by the Task Force on Racehorse Health and Safety, created by Cuomo in the wake of the carnage, concluded that 11 of those 21 could still be alive if their health had been more closely monitored.

Trainers and owners became more aggressive in medicating and running horses whose health was questionable to grab purses enriched by the money from video lottery terminals. NYRA did little to protect the animals.

There's no excuse for the shortcomings of NYRA, but in a way, the timing of the crisis and shakeup is fortuitous. Cuomo has created this temporary oversight board to transform management of racing as he seeks to streamline casino gambling overall. A constitutional amendment to legalize gambling has won the first of two approvals needed in the legislature, and an overhaul of the conflicting and contradictory laws and haphazard management of gambling in New York could happen.

As part of that, one of two rational solutions to the NYRA mess has to be embraced, and in a way that deals with the state's six OTBs. Private companies that run racing elsewhere have expressed interest in operating the state's tracks, and letting them bid for the right to do so would work. So would making NYRA a government agency -- with complete transparency, accountability and a rational salary structure.

What can't be allowed is a return to NYRA as a quasi-private patronage pit, full of abuse, without meaningful oversight, trampling on the public's trust and assets.

We've tried that for decades, and enough is enough.