Breeding

Breeder Awards Case Study: New York

New York has once again become a big apple in the United States with its thoroughbred racing and breeding program that gets funds from state gambling.

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By: Perry Lefko |

New York has four tracks – Belmont Park, Aqueduct and Saratoga operated by the not-for-profit corporation New York Racing Association, and Finger Lakes Gaming & Racetrack owned by Finger Lakes Racing Association, which is a subsidiary of Delaware North Companies. The tracks are thriving with solid purse structures because of money derived from video lottery terminals (VLTs). Aqueduct had VLTs installed in 2012 after some lobbying by horsemen to the state legislature, while Finger Lakes embraced VLTs in 2004.

For every dollar bet on VLTs at New York Racetracks, 4 percent goes to NYRA for capital improvements, 8.75 percent goes to purses, and 1.25 percent goes into the New York Thoroughbred Breeding And Development Fund that redirects bonus award money for horsemen of either New York-breds and/or New York-sired horses. The breeder of a New York-bred that wins a race receives 30 percent of the purse up to $40,000. There are also rewards of 15 percent each for the second- and third-place finisher. For New York-breds that finish in the top three but are by non-New York sires, the awards are half as much. Owners of a New York stallion whose progeny finish in the top three in a race receive 10 percent of the purse up to $10,000.

The Breeding and Development Fund was instituted in 1973, but the VLT money substantially helped to put a premium on New York-bred and New York-sired horses. Additionally, a law was passed that guaranteed 600 races a year for New York-breds. Jeffrey Cannizzo, who has been the Executive Director of New York Thoroughbred Breeders Inc. for 10 years, said when VLTs were added at Aqueduct it made a huge difference to the financial bottom line of the state’s racing and breeding programs.

“New York has always had a strong program, typically the strongest purse structure in the country, but once VLTs came to fruition it started supplementing the breeding fund and also the purses at NYRA,” Cannizzo said. “It just further strengthened our position in the industry.”

Cannizzo said the money for all NYRA purses has increased by $60 million because of the VLTs revenue. He added the Breeding And Development Fund has spiked 100 percent and is up to $20 million in revenues each year.

“(VLTs) have had a huge effect financially on our industry here, and we’ve seen the subsequent results with our foal  crop increase, which is basically a 40 percent increase since the inception of the VLT program,” Cannizzo added. Of the estimated 20,539 foals registered in the US in 2016, New York represented 7.2 percent, fourth overall behind Kentucky (40.6 percent), Florida (9.9 percent) and California (8.6 percent). Total earnings from New York-breds placed third overall with more than $86 million, with Kentucky first with more than $459 million and Florida second with more than $102 million.

Joe McMahon, who along with his wife, Anne, operate McMahon of Saratoga Thoroughbreds, which was founded in 1971, said the overall situation prior to the start of the VLTs commencing at Aqueduct was “a very bad time” in which a lot of farms closed because they could not financially afford to continue operating.

“When the (VLTs) finally did get started, there’s been a total turnaround,” said McMahon, who is one of the co-breeders of 2003 Kentucky Derby and Preakness winner Funny Cide. “The purses have skyrocketed. NYRA got out of its political mess they were in with the State, so that situation has been calm now. Things are pretty good, right now, very good. The difference from 20 years ago is huge. That (time) was just terrible, everything was very bad.”

Joe Appelbaum, President of the New York Thoroughbred Horsemen’s Association which represents NYRA horsemen, said the state of Thoroughbred racing at the NYRA tracks is “very solid.”

“I think there’s some real highlights in the strength of our stakes schedule, which is the envy of the country, if not the world,” said Appelbaum who has been a racehorse owner in New York for 15 years, has been a breeder with partners for 12 years and is a partner in a New York stallion.

“I think we have a depth of horsemen that is really strong,” he added. “We have a growing state-bred program in strength, numbers and quality, which has really been an anchor for us year round.”

Dr. Jerry Bilinski, whose Waldorf Farm has about 150 mares and stands two stallions, said the New York racing program is doing “fantastic” overall. “All the farms are doing great,” added Bilinski, who has been breeding horses since 1974. “The breeders’ awards are keeping us afloat.”

Appelbaum said the slot money helped in several ways. “It helps fund the breeding program and the number of mares producing in state have gone up amazingly,” Appelbaum said. “It’s been a huge benefit to jobs in rural areas and agribusiness. NYRA benefitted by getting money directly to their operating account and money to a capital expenditure account to upgrade portions of the track and money that goes into the purse account. Breeders have benefitted amazingly. New York-bred races are run for great purses and the breeding fund gives out great benefits.

“The funding from the VLTs has worked just as intended – by getting more people to bring their mares here. It’s benefitted horsemen, too, as purses have gone up.”