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NYRA Places CEO, Senior VP On Leave

Published: May 1, 2012 12:41 pm ET

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The New York Racing Association has announced that it has placed its CEO, Charles Hayward, and its senior vice-president, Patrick Kehoe, on unpaid administrative leave in light of a New York State Racing and Wagering Board report which claims that NYRA knew about incorrect takeout rates on exotic wagers, yet didn't do anything about it.

The issue, which led to an investigation by the state, arose when instead of lowering takeout on the exotic wagers by one per cent (to 24%), NYRA actually increased the takeout by one per cent (to 26%), which the organization said was an "unintentional oversight." That oversight, which ended up costing punters roughly $8.6-million, went on for more than 15 months. NYRA later went on to state that it could not trace all of the overcharged wagers.

In his report on the situation, which came to light Sunday, April 29, NYSRWB Chairman John B. Sabini wrote that “Various NYRA officials, including the president/CEO, were aware that the ‘takeout’ rate was above the legally allowed rate, yet continued to collect it.”

In turn, NYRA announced on Monday, April 30 that Hayward and Kehoe have been placed on unpaid administrative leave until further review. The contents of the NYRA announcement appear below.

C. Steven Duncker, Chairman of The New York Racing Association, Inc. (NYRA) Board of Directors, has announced that the NYRA Executive Committee has placed NYRA President and CEO Charles Hayward and NYRA Senior VP and General Counsel Patrick Kehoe on administrative leave without pay, pending further review. The actions follow the April 29 release of the New York State Racing and Wagering Board's interim report into the matter of incorrect takeout rates at NYRA and a letter to Duncker, also dated April 29, from Robert L. Megna, Chairman of the Franchise Oversight Board.

"NYRA takes the matters identified by the Franchise Oversight Board and the New York State Racing and Wagering Board extremely seriously," said Duncker. "NYRA will take all appropriate steps and actions to cooperate with the State's inquiries and insure the integrity of our operations. As part of these efforts, we will respond to Chairman Megna's letter as requested by May 4th. NYRA has worked diligently over the past number of years to improve the racing and agricultural industries in New York State and enhance its national status as an industry leader, and we will continue with that commitment."

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