NYRA skimmed $8.5M from winning bets
Public big losers in state jobs-cut gamble
By SHERRY HALBROOK
The Times Union in Albany broke a story in early May that put its finger right on the heart of how New Yorkers can be hurt when the state cuts key personnel and eliminates services.
In this case, the state eliminated all of its employees at the state Department of Taxation and Finance who might have caught the New York Racing Association (NYRA) when it first took excessive commissions from winning bets at the state’s horse racing tracks.
Within days after the last state watchdog left, the trouble began.
Without those PEF members on the job monitoring and checking every race day on how NYRA was handling the money it received and paid, people who placed winning wagers on exotic bets, such as trifectas, were cheated out of a total of $8.5 million before the state Racing and Wagering Board finally caught on to the problem this spring.
According to the Times Union story, NYRA was supposed to reduce the commissions it collected on such winning wagers from 26 percent to 25 percent starting September 15, 2010, but failed to do so. That was just days after the last of the parimutuel examiners, PEF member Isaac Harkaway, retired after more than 40 years on the job.
According to the Times Union, Harkaway did not leave his $93,000-per-year position as the state’s top (and by that time its only) parimutuel examiner, but he was told by a state administrator his position would be eliminated and he would be laid off if he didn’t retire.
Harkaway was the last of approximately 10 permanent parimutuel examiners the Department of Taxation and Finance had monitoring wagering and the racetracks until 1991. That’s when the department cut all of the jobs but Harkaway’s. A year earlier, it had eliminated the use of additional “per diem” examiners who monitored small harness tracks.
PEF retiree Mike Napolitano was one of the examiners whose job was cut in 1991. Napolitano told The Communicator the examiners checked racing payoffs and other figures at the meets daily.
Napolitano said he has no doubt a state parimutuel examiner such as Harkaway would have prevented the $8.5 million rate mistake.
“There’s no way this could have happened if we had been on the job.
When parimutuel wagering began in New York in 1939, the state leaders decided Taxation and Finance would be best suited to monitor this thing,” Napolitano said. “Now, I suppose it’s all done by computers, but whenever money is involved, you need eyes.”
Napolitano said he sees a bigger lesson here: “You can’t trust businesses, NYRA, or banks to keep themselves honest. The public relies on government to do that.”
Here’s how the editors at the Times Union put it in a May 13 editorial: “The latest scandal at NYRA may be a warning about how the state is cutting jobs. How much is a public employee worth? Or, to put it in more concrete terms, if you could pay someone $93,000 and prevent an $8.5 million rip-off, would you call that bloated government or money well spent?
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