GLOBAL SYMPOSIUM ON RACING & GAMING 2013

December 10, 2013

Keynote Address to the 2013 Global Symposium on Racing & Gaming Tuesday, December 10, 2013 Westin La Paloma in Tucson, Arizona

INTRODUCTION: THANK YOU & WELCOME Thank you Doug. Its great to be here with you this morning at the Global Symposium on Racing and Gaming Conference. When Doug (Reed) reached out to see if I was interested in addressing you this morning, I welcomed the opportunity. Here was a chance to be among the best, most innovative minds in our industry. And here was an opportunity to forge some new ties in The New York Racing Associations ongoing relationship with the University of Arizona Race Track Program, which we view as one of the best and most prestigious programs of its kind in the country. At The New York Racing Association, were very familiar with the UA Race Track Program. Your Associate Coordinator Liz Bracken was with us for 16 years, serving as our Vice President of Simulcasting from 2008 until leaving for Tucson this past summer and, we are very pleased to welcome to NYRA our new Senior Vice President of Racing Operations, Martin Panza, and a number of our current staffers are UA graduates as well. Thats why when you walk the hallways at any of the offices at our three race tracks Aqueduct Racetrack, Belmont Park and Saratoga Race Courseyoull not only hear the language of racing, but thanks to our UA staffers, youre likely to hear a few other thing as well: how the Wildcats mens basketball team did over the weekend. Unfortunately, way too many UA folks reminded me of the teams recent win against my alma mater, Duke. And if you listen closely enough, you may hear another term thrown about as

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well: Bear Down! (NOTE: this is the University of Arizona sports cheer and could get a great reception.) Theres a reason we like UA graduates. We know that those of you who complete the program will be exceedingly well-prepared, whether youre a part of the business path and trained in race track management, regulation and pari-mutuel racing organizationsor a part of the Equine Management Path. We know that UA graduates are equipped with a great deal of knowledge in a complex industry. And we know you share a true passion for thoroughbred racingand a passion for giving our fans, both old and new, the absolute best experience possible. Many of you know that I come from a legal, retail and entertainment background. Im not a horseman, and I dont have a background in horse racing. But I DO have the utmost respect for this sport. As a CEO of the New York Racing Association, I have met some absolutely fantastic people in this sport at every level. Now I am committed to introducing these wonderful people those members of the public who do not know about the great people in our sport, or who do not understand our sport. Some of the things youre going to hear me say today may sound a bit unconventional. Ive been on this job for less than 6 months. I dont have all the answers today. What I DO know is my goal at the New York Racing Association is to combine prudent, strategic business decisions with a fresh approach, and push the envelope to bring new people to the sport. We need to think of the sport in new ways. We have three priorities to do so, 1) enhancing our guest experience, 2) the quality of the racing product in New York and 3) our movements towards re-privatization. 1) ENHANCING THE GUEST EXPERIENCE It is critical to enhance the experience of our guestson-track and off-track. This is where we introduce people to our sport, where they can become enraptured with this
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incredible game and these incredible equine athletes. This is also where we introduce people to the thrill of winning a bet, a place where they can learn how to wager successfully. One of the things I learned in positions at Universal Parks & Resorts, Toys R Us and elsewhere is this: In order to succeed, it is absolutely essential to focus with laser-like precision on your guests. Because we invite them to our stores, our parks, our facilities, we treat them as our guests. Its no different in this industry. Our fans are the lifeblood and the future of our industry. When we say our guests who are talking about? I have learnedthat it can be a mistake to think of all our guests in the same way. We segment our guests in various ways: age, gender, and whether they are a novice, casual or core fan. We also segment the market from their financial commitment, from the person who will make a $2 dollar bet, to a person who has been an owner for two decades. Lets look at some of those market segmentations: On one end of the spectrum are the novice fans, people who dont know much about horse racing and come to the track for a fun day, usually accompanied by family or friends. These fans want to watch some races, bet a few dollars and be entertained. We see a lot of novice fans at Saratoga, people in town on vacation with their kids or for a weekendand it is for them that we need to create a great experience. The food and beverage, the music, the ambience is important. We want to make an easy introduction to an enjoyable , often mutli-dimensional experience.

In the middle are the casual fans. They know the track, have been with us before, and we need to ensure they keep returning. Casual fans know racing and the quality of our product. For them, we need to provide reliable, friendly, attentive
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service, a facility and of course, great racing. And, we want them back. We want them to learn more about how to succeed when wagering, and about the people of our sport. And we need to offer some extrasmusic, perhaps, along with alternative activities to fill time between races. We want to make what we will hope to be a lasting connection. And, we want them back Our goal is to create special, unforgettable experiences for both the new and the casual fan. And for both, we are working hard to reaffirm what it means to serve, really serve our guests. That means something as simple as engaging our guests the moment they enter our grounds, for example giving them a good afternoon when they arrive and a good evening when they leave. It means answering their questions and giving directions in a prompt, friendly manner. It means handing out amenities as neededa map or perhaps a quick primer on wagering. It means connecting with them on their needs and desires whenever and wherever possible. We truly care about our guests and we demonstrate that care with our actions. That means going the extra mile when needed. Dont just point the way to the paddock, the mutuel window or the escalator; walk a guest there. Racetracks are big places, and so satisfying the guest need is paramount. Theyll go home, tell their friends and family what a great time they had at the track, and come again. Word of mouth can be great advertising and it doesnt cost a penny. We have to keep in mind that racetracks have a special challenge: Many of our guests will have lost money by the end of the day, and so we will have to work extra hard to ensure they leave with a good feeling about us. How do we do it? It starts with management. I was out there every day walking the property and so were the rest of our executives. We started working the property before everyone arrived. We walked the property the rest of the day to make sure we met the need of our

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guests. We spoke with our guests and employees alike. We responded to their suggestions and their problems. And we created additional training for our employees. At Saratoga this summer, all our employees took mandatory training in The Americans with Disabilities Act and to learn how to serve guests with special needs. Those lessons learned in those training sessions applied to all of our guests. We created name badges for all staff to establish a more personal connection and to build accountability. And we encouraged staff to think creatively in how to assist guests. We had meetings to receive and discuss our employees best ideas, several of which we put into action. All the success stories are too numerous to detail here. Ill mention a couple. There is Sandra, a parking lot attendant who at Saratoga would borrow a staff golf cart in order to drive lost guests to the correct lot mile away. There is Len, a peace officer, who on finding a lost little boy did his jobcalling into the office and staying at his post with the boy as we found the mother. But then Len eased the boys nervousness as they waited with an impromptu game of rock-paper-scissors. We held these employees up as examples for all employees. Each day we recognized one employee as an Unsung Hero. Their name, picture and the extraordinary work or service they performed were included in our daily news circulation, the Overnighter, and displayed on our video screens, with our world-class announcer Tom Durkin announcing what that particular employee had done to earn the award. We gave that recipient of the Unsung Hero award a DVD copy of Tom Durkins commentary of the video screen and several copies of the Overnighter to send to friends and family. What these stories show is that our effort to enhance the guest experience is working. And that goes not just at Saratoga, but at Belmont Park where we raced this fall and at Aqueduct Racetrack, where we are now and will be until the end of April.

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How do I know? I know from the examples of people like Sandra and Len, which staff tell me about. And I know from letters Ive received, e-mails and people pulling me aside in the grandstand. Its the newbie telling us about a mutuel clerk who took an extra minute to patiently help him place his first-ever bethelping to made it a memorable day to the track. Its the patron writing in, impressed that we had found and returned her lost wallet, money and credit cards intact, after tracking her through her library card. These are true stories, all of them. Enhancing the Guest Experience helps employees as well boosting their morale with the knowledge that their actions will be reciprocated. This strategy worked elsewhere and Im proud to report that its working at The New York Racing Association. Beyond these supporting comments, we have data to suggest that this initiative, which we began this summer at Saratoga, was successful. There are several different ways to measure the success of the Saratoga meet. One way that has been used in the past is to measure the attendance. The attendance in the Saratoga 2013 meet was 867,182, roughly at our 5 year average. Some members of the press tend to focus on attendance more than I do. Attendance doesnt spend, people do. So, a more meaningful way to evaluate the success of a meet is to look at the financial data, starting with the handle. The handle for the Saratoga meet was $586,685,156, which represented the 2nd highest total in 5 years. Another way to financially evaluate the guest experience is to look at how much money our guests spent while they were at the track, on food, beverage and souvenir merchandise. In fact, the amount spent on such items commonly referred to as per cap (which is short for per capita spending) was 15.2 percent higher than last year, and the highest amount spent on such goods in the last 3 years in which such records have been maintained, and we have a record amount of food & beverage (12%) without considering any of the 150 Saratoga special merchandise.
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Turning to the 2013 fall Belmont meet, we saw an increase in all of those metrics as well. Our attendance was up 10.6 percent. Our handle increased 9.8 percent over last years Belmont fall meet. We started the Aqueduct meet only a month ago, and those results are encouraging. Meet-to-date, daily average attendance is up 2.3 percent. Total handle increased 8 percent over last year. As I said, I believe we can model some of our guests experiences at the racetrack in a similar manner to what we did at the Universal theme parks. At Universal, we created different areas and different islands, each with various amenities targeted to the various guest segments. A new experience at the track can be a new dining experience, even a series of new food trucks, or creating an area where young children can touch a horse. But most people come to the track to gamble, and part of the reason for the increase in our handle is due to the fact that we have introduced some new and innovative wagers that are more accessible for the new fan and attractive for the casual fan. These new wagers can create an adrenaline rush a chance to wager as little as 50 cents and make a big score. As an example, although I dont claim this is an innovative wager for the country, in this instance we are simply catching up to others. As an example, at our recently concluded fall meet at Belmont Park, we used the 50cent Pick 5 to help set a five-year high in both the all-sources and on-track handle. This is another way were turning new fans into casual fansand keeping them. This is how we can make sure the casual fan keeps coming back. And its a clear message were heading in the right direction. Were taking steps to introduce more people to our sport as novice fans, getting them engaged in the experience, and the thrill of winning, to convert them to casual fans.

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Another, and extremely important, segment deserving of our focus are core fans. There are many gradations of core fans, based primarily on how much they wager. Some core fans are on track but many of them are off-track. More in a minute on the importance of meeting their needs, but I met with a number of core fans at the track. I listened and responded to their individual needs. I appreciate the comments they made with respect to field size, the number of races on the card, and the quality of our racing, especially in the winter months. A further, very important segment are the owners. These are people who have often devoted their lives to our sport, so its imperative that we provide them with a kind of ultimate guest experience: making sure their experience at the track is comfortable and that all their needs are met. That means employing all aspects of the enhanced guest experiencewith a touch of creativity. One prominent owner, someone youve heard of, always asks that a certain reliable peace officer be assigned to him. Weve done it for years, and believe me, we will continue to do so. Recently we met with representatives from Keeneland, Del Mar, and the Stronach Group to explore how to provide a better experience for owners as they move their horses to race from one track to another. We all want to provide a first-class experience for our owners and we are now sharing best practices on how to do so. Finally, there is another, often overlooked segment: Theyre potential owners, the future of our business. They tend to be people who have found success in other businesses, particularly as entrepreneurs, and they already like horse racing. Our goal then is to really capture these potential owners by exposing them to owners, trainers and jockeys, and showing them around. And these arent any trainers or jockeys; theyre the best in the business and committed to helping us build our brand. Our current owners are the best ambassadors and recruiters for new owners. We want to work with them to create a new way to market the excitement of owning a piece of a sports franchise, and creating a whole new generation of sports owners. At Saratoga,
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we hold breakfast and lunch seminars for new and potential owners. The events have been successful sellouts. We will continue to enhance this program, and work with our colleagues at other racetracks to inject new blood at the ownership, syndicate and partnership levels across our industry. So our task is to look at all these segments and create marketing strategies for each of them. In addition, we also need to look at demographics, principally people by their age. And that means doing everything we can to attract the 18-to-34-year-old segment. Capturing the young-adult demographic is prized in just about every industry. But after hearing my colleagues talk about their experience at this years Belmont Stakes, I think The New York Racing Association has a legitimate opportunity to make real inroads to attracting many of those people to thoroughbred racing. Pouring off the Long Island Railroad and into Belmont Park on Belmont Stakes Day last June were waves of 18-to-34-year-olds. Many were well-dressed and in a holiday mood. Many of these guests had attended previous Belmont Stakes and seemed to know their way around. So to my mind, the question was not how to make sure they would be here at next years Belmont Stakeschances are they will be. The question is how to attract them at other times during the year. We know that other top tracks take different tacks to attract fans. Del Mar has a longrunning concert series. Gulfstream Park hosts comedy shows. Delaware Park has racing, the slots and a golf course. Keeneland has the Hill. And Santa Anita recently hired Gene Simmons, he of the considerable face paint and the rock band, KISS, to bring the power of celebrity to the track. Well employ some of these best practices. Along those same lines, we are working on ways to create a great place to party as well as a great place to see some of the finest horse racing in the country, at all of our tracks.

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And when I say a great place to party, we are ever-conscious that we serve different market segments that have different ideas of what constitutes a great party.

We took into mind the considerable advantage of our location. Aqueduct Racetrack, where we race from November to the end of April is the only racetrack in New York City. Its in the borough of Queens, close to JFK Airport and easily accessible via highways and on the train. And by virtue of being a short distance to Brooklyn and Manhattan, its very close to a large population of those 18-to-34-year-olds, the same young adultcrowd who attend the Belmont Stakes, who have disposable income, and are known to be enthusiastic about retro activities like bowling, arcade games and pool. In New York City, you better have a place with a buzz, a vibe. How do you give a new vibe to a racetrack that has been open since 1959? And how to you introduce such a place to a whole new generation of urban young adults? So a couple of weeks ago, we held at Aqueduct the first-ever racing-themed street-art show. In hosting 14 contemporary street artists, we drew a lot of new fans to our track. We created buzz. We authenticated the cool factor of our brand in the eyes of this target demographic. And perhaps most important of all, we at The New York Racing Association are showing how outside-the-box thinking can benefit our sport. Were also focusing on another critical demographic: women. On one hand, many of the steps were taking to enhance the guest experience are already targeted to women. By making a visit to Saratoga or Belmont Park a more pleasant experience, were making it more appealing to women, families and children. As documented by the 2012 report from McKinsey & Company for the Jockey Club, only 20 percent of the public have a favorable view of our sport. So in making the track more fun for everyone, were building a new base of fans.

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Consistent with my desire to connect our fans with the great people of racing, I want to bring peoples attention to the women of our sport. Shortly before I became CEO, I learned of Mary Lou Whitney and all of her contributions, and they are significant. The important thing was to honor Mary Lou as a horseman, as well as a philanthropist. She bred, raced and stands Birdstone, winner of the 2004 Belmont Stakes and Travers Stakes and she bred and raced champion filly Bird Town, making her the only woman ever to breed and race a Kentucky Oaks winner. She is an eclipse award winner because of her success in horse racing. But Marylou is not the only woman who has made great strides in this sport. I would sit between races and look at those video screens in the infield and realize there was a tremendous opportunity to connect the people of our sport with the people in the stands. So we started a series of interviews with some of the great women in horse racing, owners such as Charlotte Weber, owner of Live Oak Plantation, and Laurie Wolf, leading a new generation of women owners who are part of the StarLadies Syndicate. We interviewed successful women trainers such as Linda Rice, and top jockey Rosie Napravnik. And all of these interviews were conducted by our own on-screen paddock analyst, Maggie Wolfendale. Were putting the spotlight on the women in our sport. And we created a number of events with women in mind, starting at Saratoga. We had a day of racing called Fabulous Fillies Day in which we invited women to lunch with Mrs. Marylou Whitney, and encouraged them to wear pink and dress in big stylish hats. We honored Marylou Whitney for all her achievements and contributions. The lunch was a lot of fun, the talk of Saratoga. But we also dedicated the day to a serious purpose: raising money and awareness for the Breast Cancer Research Foundation. It was a big success in a lot of waysso much so that we did it all over again in early October at Belmont Park.

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In doing so, we deepened an important partnership with the Breast Cancer Research Foundation. We demonstrated that the track is a place to have fun and even dress up if you want. And combined with events like Family Fridays this past summer in Saratoga and pumpkin picking and a country concert this fall at Belmont Park, were affirming that our tracks are true family places. The final on-track demographic that I want to address has relevance across many of the programs Ive mentioned. Its people with disposable incomeand looking to spend a portion of it in a sports or entertainment venue. Theyre a large group with the means of going to the track or somewhere else for their entertainment. So the question for us is a broad one. And its one that we have already started to address: What kind of activities or amenities do we need to add at our sites in order to be competitive with other entertainment and sports venues and what they offer? The recent street-art project at Aqueduct is one of the ways were reaching out to nonracing people with disposable incomes and giving them a reason to visit the track. We did the same this summer at the traditional Open House before the start of the Saratoga meet. We hosted a free concert with the Disney star, Zendaya, which drew more than 20,000 on a day when the temperature was in the mid-90s. I know thats just another day for you in Arizona, but its very hot and uncomfortable for us in the Northeast! One reporter noted that there was an army of mothers and daughters hand-in-hand streaming into the Saratoga Race Course for a memorable experience. This was an experiment, but the audience loved it and the reviews were great. So the message was clear: keep thinking outside-the-box. And we will be doing so in 2014. We will create and area where families, young children in particular, can touch one of our horses. Also at Saratoga, we will be installing 550 new flat screen television and several new high definition video boards. At Belmont, we are going to create a more intimate experience for our fans near the finish line. We are also going to create a great tailgating place on our big event days.
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These are some of the steps we will take in 2014. But there is an even larger question, and one considerably more costly: How do we complete with other major sports venues that have been built in the last few years and offer so many to their fans? That is part of our challenge and our opportunity as we re-privatize The New York Racing Association. *** So what do we do for the off-track racing fans, the people who follow us but do so remotely? Quite a lot actually. It starts with our ongoing project to create a state-of-the-art social media platform and high-definition television and internet video-streaming that I believe are second to none. Considering the ratio of off-site fans compared to on-site is now at 5 to 1, this is an absolutely critical endeavor. Thats why The New York Racing Association has in recent years devoted considerable resources to upgrading its television and internal video. Off-track fans simply must have the best, clearest view of every one of our races whether theyre watching from their living room or at the simulcasting center or from their laptop, their tablet or smart phone. Its also important they be provided with the maximum degree of quality information during the race. So to make that happen, we recently installed Trakus at Belmont Park and will be doing so at Aqueduct starting this week in fact and at Saratoga in time for the start of the 2014 racing meet there. Most of you are familiar with Trakus, so I dont have to go into a lot of detail. In a nutshell, Trakus enables viewers to follow the precise position of each horse throughout
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a race via colored chicklets at the bottom of the television screen. It even collects data such as the total number of feet traveled by a horse and its average speed during a race. Meantime, were providing our off-track patrons with a lot of amenities in between the races: the latest in racing and handicapping information and analysis from our top-notch broadcast team. They include our track announcer Tom Durkin, whose voice you probably know. Its a comprehensive platform that gives customers the best possible visual and wagering experience in the business. And because its online, we can use the analytics to adjust and make it better. Along with Trakus, we have just entered into another new partnership with an industry leader, this one with the well-known Advanced Deposit Wagering or ADW provider, Global Betting Exchange or GBE. The way we see it, this is a kind of pairing of the best with the best, like our relationship with Trakus. So we look forward to GBEs expertise in providing us with technological upgrades to our ADW platform, NYRA Rewardsand making online wagering easier and more efficient. We want to also be well positioned for the day of exchange wagering, and GBE is the best in the world in that area. We project to offer a new platform for our wagering customers by the Kentucky Derby.

2) THOROUGHBRED RACING IN NEW YORKQUALITY OF RACING PRODUCT What I have learned from the various industries in which I have worked is this: There is no substitute for a quality product or service and for the quality of people in your organization providing those products or services. We already had an experienced, diverse team at The New York Racing Association, a team that is hungry to do some things differently to win, and in all cases to do things the right way. But like any good team, were constantly on the search for top talent. That is

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the reason we have just brought in a new member of the senior team: Martin Panza, our senior vice president of racing operations. Many of you may already know Martin. He is the former Vice President of Racing and the Racing Secretary at Betfair Hollywood Park. And he is among the best, most innovative minds in thoroughbred racing. As such, Martins mandate with us is both broad and intricate: He will lead our team in defining best practices for our racing product. And he will lead the way to ensure we have quality racing that is sustainable over the long-term. That means we need to have a better idea of what races will be run on a daily basis; the appropriate fields for those races; and the appropriate purses. At this point, we have many options. We have to determine how to use our significant purse money to ensure the quality of racing for our fans. We think the key to our success is to make big event days even bigger. With so many sports entertainment options available, we need to shine on those days when more people are watching us like the Belmont Stakes and the Travers. And one thing I like most about Martin is his entrepreneurial spirit coupled with his love and respect for this great sport. As a result, Im excited to see what we will do with the approximately $6.2 million more money for purses in 2014 than we had in 2013. We will use those sums to create greater purses, greater quality and greater buzz for our big event days. And possibly, the development of new big event days. These are questions for Martin to tackle. Based on his accomplishments at Hollywood Park, were confident that he is the right person to lead our racing team. After all, it was Martins leadership that led to creation of the American Oaks, the prestigious turf race for 3-year-old fillies that received a Grade-I ranking in its initial year of eligibility. Martin also produced a sponsor for this event, American Airlines, and was able to recruit horses to the race from Europe, Asia and Australia. For these reasons and many others, we are

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very happy to have him aboard. He will lead our efforts in improving the quality of our racing, and maintaining our high standards. In a sense, our goal is to ensure, as the McKinsey study stated, that the core values of racing remain strong. And its to achieve what, as a McKinsey symposium recently put it, that the flight to quality racingthe enduring public interest in graded stakes races endure as well. We believe we have some of the finest racing in the country and we are committed to creating even better product in 2014 and beyond. Meanwhile, were looking hard at another critical issue in our industry: reducing the number of horse fatalities. Our mission at NYRA is to Meet the highest standards in thoroughbred racing and equine safety. Equine safety is a high priority for us. Were in the process of training more of our people to be investigators. We have created a policy of heightened security in the 24 hours before our biggest races like the Belmont Stakes and the Jockey Club Gold Cup Invitational: installing round-the-clock guards and cameras in the barns of competing horses. We have also established an Equine Safety Committee to review and assess fatal equine racing and training injuries at our tracks. This was among the key recommendations set forth by the New York Task Force on Racehorse Health and Safety. The results have been encouraging. Comparing 2012 to 2013, as of this moment, we have reduced the number of racing fatalities by one half, and have maintained a rate that is significantly lower than the national industry average. As we look forward to 2014, we will continue to take additional steps to improve equine safety. We are:

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1) In the process of hiring a veterinarian that will be dedicated to working with our Horse Watch Detail to identify any type of inappropriate medication activities on our properties. 2) Installing surveillance cameras in the Test Barn, Assembly Barn and Receiving Barn at all three of our facilities. 3) In the final stages of an extensive review and modification of our existing House Rules, which we will finalize in consultation and cooperation with the new State Equine Medical Director. Another goal is to keep our focus firmly on doing everything we can to boost the New York State racing industry and its substantial economic impact on the State. People unfamiliar with racing are often surprised to find out how much economic impact the equine industry has to the State of New York. Overall, some 32,000 people work in the states equine industry, which contributes more than $4.2 billion annually to the state economy. As the cornerstone of our industry in the state, The New York Racing Association has fully embraced its mission to contribute in every way possible to the future of our industry. This fall for instance, we featured seven stakes races with the New York-bred horses at Empire Classic Day at Belmont Park. And if you dont recognize the name of the winner of the $250,000 Empire Classic that daySaratoga Snacksyou have probably heard of his owner, the Hall of Fame football coach for the NY Giants, Bill Parcells. With our focus on NY bred horses and significant stake races for those horses we are playing an important role to improve the quality of NY racing. This corresponds with another action underway at The New York Racing Association: our comprehensive look into every part of the state of thoroughbred racing in the State of New York. Were looking at racing from every perspectivefrom the Handle to the Foal
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Crop and the Field Size. And were doing so to determine how to make things better and respond to changes in the industry. We are also experimenting. For instance, at Aqueduct this January through March we will experiment by conducting live racing on Monday and we will be dark on Wednesday. Some would argue that there is little interest in racing on Monday, while others say its an opportunity since few tracks race on Monday. We are going to use 2014 as a year to test certain things so that in 2015 we can include those tests that worked and not include those that didnt. Rather than say, We think this will work, well test it and see if it works. We know there are challenges ahead of usand we recognize how critical our performance is to the industry. The New York racing product accounts for approximately 20 percent of the daily nationwide handle, even higher at Saratoga. Its imperative that we support our day-to-day racing because it generates significant handle and because it attracts our smaller and mid-size ownersthe ones we want to get into the game. Doing what we can will require a lot of work, the wise use of our resources and creative ideas. But the driving principal is always to improve the quality of our racing. With the recently concluded fall meet at Belmont, and one month into our Aqueduct fall meet, there is a real sign that were headed in the right directionthe key performance measures of total handle, on-track handle, attendance are up over last year. Yes, were on the right course but rest assured were looking at all of the issuesand will continue to vigorously do so. 3) NYRA RE-PRIVATIZATION Which brings us to our third priority, the re-privatization of The New York Racing Association. In this area, time and the future of NYRA are of the essence.

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In 2012, New York Governor Andrew Cuomo placed The Association under majority control of the state with the mandate to develop a reorganization plan by October 2015. The Governor has appointed some tremendous members of the Board of Directors people with many decades of racing experience and others with a range of expertise in business, finance, real estate development, media and entertainment, and equine safety. Some of the racing names you may recognize: Stuart Janney III, for instance, and Michael Dubb. And others you may recognize but for reasons beyond our sport: Bobby Flay, the renowned chef, restaurateur and thoroughbred owner is a member of the board. And so is Jane Rosenthal, the acclaimed film producer and co-founder of the Tribeca Film Festival. Our Chairman is Dr. David Skorton, a cardiologist and the President of Cornell University. But this group is more than just a collection of people with impressive credentials. They care deeply about doing whats right for The New York Racing Association. They bring unique and valuable perspective because theyre used to working on many of the same issues in different industries. So one of my major challenges is bringing out the best from the experience of all our board members, and to do so by using their time wisely. Like them, Ive worked in many industries. Like them, Ive worked on a range of legal, financial and regulatory issues. And like many of our board members, I thrive on working with different stakeholders, including big government. We all recognize that were already working with several tremendous advantages: a strong brand and franchise; three phenomenal race courses; and the greatest market in the world, New York.

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Our job is to create a sustainable financial and business model for the future of our organization. We need to look at this from a standpoint of bringing in new fans, new owners, new ways to be entertained, and new ways to connect to people, on-track and off-track. We need to look at what changes, if any, need to be made to our laws. We need to look at what changes, if any, need to be made to our real estate interests. And finally, we need to look ahead to foresee the trends in our sport and build a platform that will be nimble enough to meet changing consumer demands as they occur. To help in our efforts to plan for the long term, we have retained a consulting firm to obtain data and information on current and future industry trends in horse racing and sports/entertainment venues, so that we may analyze various scenarios for each racetrack, weigh the costs, project return on investments and create a well-informed and comprehensive plan for future business growth. As weve already talked about, were cognizant of the fact that more people bet off site than on site. And were fully prepared to do what has to be done to put us in a better position as an organization to improve revenue streams from television, from internet and mobile wagering platforms. To put it another way, we know that whats good for our guestsboth on-track and offtrackis good for our bottom line. V: CLOSING I have outlined a number of challenges. But to everyone here and particularly to students in the UA Race Track Program, I have a message: Put aside any dire stories and blogs that forecast the demise of thoroughbred racing. Other blogs are forecasting the demise of everything else, from the NFL to life as we know it in America. Negativity has found a home in the internet chat rooms of America. Look instead for opportunity. Youre about to enter our business at a great time. What we have before us, right here,
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right now, is an opportunity to create a new generation of thoroughbred racing fans through new communication channels that didnt exist ten years ago. And I couldnt be more excited for the future. We talked earlier about the importance of capturing the attention of the 18-to-34-yearolds, the millennium generation who thrive on instant gratification. But let me ask you: Is there any other sport besides horse racing that can provide that rush of instant gratification that we have? Certainly, baseball doesnt provide. You have to wait 9 innings to see if your team won. We provide instant gratification at the end of every race. You can bet 9 times in a given day. Races take on average one-to-two-minutes. This is absolutely unique from all other major sports. Give this idea some thought as well: In horse racing, what you think matters. I love football but when I watch a football game, Im emotionally invested in how my team does, but I dont know enough about their strategy to really understand whats going on at any given moment, and I sure cant use what I know to alter the outcome, or control the outcome. But in horse racing, I can use my intellect, which makes it an intensely emotional experience thats different from football or baseball. There is a greater chance for me to use my brains to predict the result of this sporting event with greater confidence. Its about focus and control. Look at fantasy football. People are not betting on the existing team, but rather on their teams. Why? What I think may be different from what you think. You may have the edge, but with enough study and a dose of luck, I hope Ill win. There is a lot more to this sport than fantasy football. I care because there is a level of emotion and a connection in thoroughbred racing that you just cant match anywhere else. In a world where people want to show how much smarter they are than the next person, our sport is tailor-made for that crowd. And that crowd is all of us.

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Were experimenting to find out how we can get new fans to our sport, particularly people in their 20s and 30s. People like you. Experiment on how to connect with people through new software platforms, tablets and cell phones. The devices you know so well and use so deftly. In other words, were going after people like you by using the tools you use every day, with your ideas of time of excitement and of entertainment. Who better to shape the future of our sport than the people in this room who know the sport, love the sport and know how to communicate with new generations of fans because you are the generation of fans. The potential is here for a revival of a great sport, and you have a great opportunity to play the major role in that revival. Ive enjoyed our time this morning. Thank you very much. # # #

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