Horse-racing bettors at some of New York’s most prestigious tracks were forced to pony up more than $7 million in extra fees by the New York Racing Association, a probe has revealed.
Bettors who placed wagers at tracks such as Belmont Park and Saratoga Race Course were overcharged in “takeout” fees thanks to gross negligence by the racing association, according to the state inspector general.
Takeout fees refer to the track’s percentage cut of a wager.
To stem a budget shortfall, the state allowed NYRA to increase its takeout rate by 1 percentage point, to 26 percent, for two years starting in 2008.
But NYRA kept collecting the 26 percent after the temporary boost expired in 2010, raking in more than $7 million in extra fees.
The overcharging took place on “exotic,” or high-stakes, bets. Only $622,000 has been refunded, since many of the bets were cash and there is no means of tracing the bettors, the report noted.
The agency is trying to compensate by lowering its take now to 24 percent.
Inspector General Catherine Leahy Scott said the overcharge was due to “a misreading of and inattention to the law by NYRA officials and weak financial controls and oversight.”
“New York’s horse-racing industry is steeped in tradition and is very important to New York’s tourism economy,’’ Scott said. “Unfortunately, what occurred undermined that trust because NYRA took earnings away from bettors that were rightfully theirs.
“The new leadership at NYRA has undertaken and implemented significant changes to their processes that should restore the public’s confidence in New York’s gaming industry,” the inspector general said.