NY comptroller subpoenas NYRA financial records

NEW YORK (Reuters) - New York State's comptroller said on Monday he subpoenaed records of the New York Racing Association as part of efforts to audit payments made to the association over the past couple of years and money the state says it is owed.

Comptroller Thomas DiNapoli said in a statement the subpoenas were issued after his office was denied access to financial documents of the NYRA.

The association operates three horse-racing tracks in the state, including Belmont Park, which is home to the Belmont Stakes, the thoroughbred race held every June that is part of the Triple Crown.

DiNapoli said prior audits of the NYRA showed it failed to pay the state nearly $54 million in franchise fees from 2000 to 2005.

While the NYRA claimed in September it was financially stable, it "now says without (video lottery terminal) money it may not be able to stay in operation until the Belmont Stakes," DiNapoli said. "In the meantime, it has been trying to hide its books from my auditors.

"It's the same old NYRA in new sheep's clothing, trying to shortchange taxpayers again," he added.

The NYRA said in a statement that it "cooperates fully with those state agencies that have actual legal authority to regulate and audit its operations," but said the state comptroller is prohibited under New York's Constitution from auditing nonprofit entities.

The NYRA said a declaratory judgment from the judiciary on that point may be needed to resolve the matter.

DiNapoli said that under the franchise agreement, the comptroller has the right to audit NYRA books and accounts.

In 2008, New York State gave the NYRA about $105 million to help it emerge from bankruptcy as a nonprofit corporation.

The NYRA reconstituted itself as a nonprofit entity in order to acquire a new 25-year franchise to operate thoroughbred horse racing tracks in the state.

The state also pledged 14 percent to 16 percent of revenue from video lottery gaming terminals once they became operational at the Aqueduct racetrack in New York City's borough of Queens, but the project has repeatedly stalled.

(Reporting by Tom Ryan, additional reporting by Karen Pierog in Chicago; editing by Leslie Adler)