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$15 MILLION FOR BELMONT
New York racing, suggested The Jockey Club, can best be served if all four flat-racing tracks join hands under the guidance of the club to provide comfort and convenience for all the people who like racing. "In short," says Hanes, "invite them to come racing instead of inviting them to stay home." High points of the proposal made to the Racing Commission for remodeling the operation of the sport in New York:
1. To form a nonprofit Greater New York Racing Association by buying and merging the separate corporations which now own Belmont, Jamaica, Aqueduct and Saratoga. The new Association would spend nearly $50 million now and another $45 million within a few years.
2. To concentrate racing on a big scale at Belmont (completed in 1905 at a cost of about $2 million) by investing some $15 million toward modernizing its plant and increasing seating capacity from 23,000 to 32,000, eventually to 50,000. The mile-and-a-half track (largest in the U.S.) would be reduced, and in the cutback the controversial Widener chute, which gives horses a wonderful racing straightaway and spectators the worst possible view of racing, might be doomed. Much of the work could be finished by next fall, the whole job completed by the spring of 1956.
3. To invest another $3 million in grandstand facilities and improved track conditions at Saratoga.
4. Jamaica to be discontinued as a race track and the real estate sold.
5. Aqueduct to be maintained as an operating track until the modernization at Belmont is completed. Then reconsider plans for another ultramodern track (cost: about $45 million) to go up on the present Aqueduct site.
Proposed capitalization for this whopping transaction would consist of debt and non-dividend-paying common stock owned by The Jockey Club, whose members would have voting privileges to appoint the Association's top officials. Some $27 million would be spent by the new GNYRA to purchase the four tracks (based on an estimated valuation of $8 million each for Belmont, Jamaica and Aqueduct and $3 million for Saratoga). Hanes's committee already has procured an option on over 80% of the Belmont stock and has offered to purchase the stock of the three other tracks. All four existing individual racing franchises would be kept alive and their respective officials remain in office.
The public has not been alone in its grievances about the New York situation. Private management has felt particularly handcuffed because, though the pari-mutuel takeout is 15%, highest in the country, only 4% of this goes back to the track. Thus, while other tracks, permitted by state law to retain a higher percentage of the take, can afford grand-scale improvements ( Hialeah threw open a new $2,500,000 clubhouse, Santa Anita added 5,000 grandstand seats and can now accommodate 33,000 cars and Garden State will open a track-sponsored hotel on Oct. 1st), New York is constantly in the throes of a tight pinch. Last year, for instance, New York State gained $32,525,600 from racing, but the four tracks could afford to spend only $1,281,250 on improvements. Over a million was spent at Belmont. Jamaica, amazingly enough, got by the year without spending one nickel on improvements, and investments at the other tracks were necessarily limited to the installation of such safety factors as sprinkler systems in the barns and building bunkhouses for stable help—and little else.
At the same time New York raised its purse distribution to an all-time state record of $9,535,390. It didn't require The Jockey Club's brains to see that the system which maintains racing at a very high purse level in the face of the least sympathetic tax laws is doomed. The new nonprofit proposal will urge the state to receive as taxes such of the income as it desires to take—after the payment of purses, operating expenses, debt service and provision for improvements. "The state, after all," says Hanes, "should be sympathetic to more revenue. Our plan should prove to them that by lowering the percentage of the take the state can get more money—for the simple reason that modern enlarged facilities will attract more people who in turn will bet more money."