According to a recent investigation conducted by the Times Union, the New York government has granted the state's horse racing industry over $2.9 billion since 2008, both in taxpayer dollars and government-directed benefits.
One year ago, a study commissioned by the state indicated that eight tracks in the state would likely be forced to close without those subsidies. The only remaining tracks would be those operated by the New York Racing Association, though the racing would be “diminished” and breeding would be “devastated.”
NYRA statements examined by forensic accountant Radha Radhakrishna indicate that via GAAP (Generally Accepted Accounting Principles) the non-profit organization posted an operating deficit of $55 million in 2020 prior to considering the government support funds and benefits.
Between 2016 and 2019, those statements indicated that NYRA produced operating losses between $76 and $81 million each year.
NYRA spokesman Patrick McKenna said the non-profit uses non-GAAP standards in its accounting, which showed an operating loss of $3.1 million in 2020 and an income of $4.3 million and $3.6 million in 2019 and 2018, respectively.
“NYRA's racing operations have been profitable every year since 2014 apart from 2020, when NYRA faced an unprecedented business interruption due to the COVID-19 pandemic,” McKenna said. “It should be noted that (the prominent accounting firm) KPMG has issued 'clean' and unqualified audit opinions in each of those years.”
However, New York comptroller Thomas DiNapoli's audits in 2016 and 2018 show that NYRA actually produced multimillion-dollar deficits each year, adding that the non-GAAP accounting methods should not be used to report profits or losses to the public.
“Reporting such numbers to the general public and to the NYRA board in this way is not a fair presentation of the profitability of NYRA's racing operations, and can leave decision-makers with the false impression that no actions are required,” wrote Comptroller Thomas DiNapoli.
Read more at the Times Union.
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