BUSINESS

New York Racing Association CEO and senior VP fired after overcharging bettors

TAGs: Charles Hayward, horseracing, New York, NYRA

new-york-racing-association-ceo-firedHorseracing’s run of bad press continues… On Friday, the New York Racing Association (NYRA) board of directors announced it had fired NYRA president/CEO Charles Hayward (pictured right) and senior VP/general counsel Patrick Kehoe after determining the execs had “failed to perform their duties at a level required by the Board.” On Monday (April 30), the pair had been placed on unpaid administrative leave following the release of a state Racing and Wagering Board (RWB) interim report that found NYRA management had intentionally shortchanged bettors $8.5m by extracting a 1% higher than allowed “takeout rate” from winnings between Sept. 2010 and Dec. 2011. The NYRA was operating at a loss at the time.

The RWB report also determined that the fired NYRA execs tried to keep any discussion of the overcharging from becoming public knowledge. The RWB claims the coverup began after an irate bettor informed Racing Form publisher/columnist Steve Crist of the skewed math being practiced by NYRA on certain exotic wagers. The RWB cited an email exchange in which Crist informed Hayward of the allegation, but Hayward asked Crist to keep it under his hat, lest the adverse publicity cause the NYRA to lose favor with state politicians. The RWB claims Crist agreed to Hayward’s request, but on April 30 the Daily News quoted Crist saying he’d been unaware that NYRA was fiddling with its figures and “would have put it on the front page” had he known.

In December 2011, State Comptroller Tom DiNapoli uncovered the overcharging during an audit of the New York Breeders Fund. On Dec. 28, the NYRA lowered its takeout rate to its legally mandated level and refunded roughly $600k to some of the aggrieved bettors. At the time, Hayward told state regulators the cockup was an “inadvertent” booboo caused by the “complexity” of New York’s racing laws. Precisely where the ill-gotten $8.5m was destined to end up remains unclear, but the RWB suggested NYRA was stockpiling the cash “for perceived political and financial reasons.” The state Inspector General’s office is now conducting its own investigation into the matter.

On Saturday, Hayward released a statement through his lawyer, saying he was “extremely disappointed” by the board’s decision to fire him from the job he’s held since 2004. Hayward took issue with the “flawed and admittedly incomplete” findings of the interim report, which he claimed “badly misinterprets documents and was prepared without interviewing me or any other individuals relevant to their investigation.” Hayward said he expects to be “fully exonerated when all the facts come out.”

Comments

views and opinions expressed are those of the author and do not necessarily reflect those of CalvinAyre.com