New York Racing Association CEO Charles Hayward and general counsel Patrick Kehoe were both put out to pasture on unpaid administrative leave this week, following a report by the New York State Racing and Wagering Board that the NYRA knew of bettors being overcharged by one percent on some types of bets.

The New York Daily News says the report found that:

During a 15-month period from Sept. 15, 2010, through Dec. 21, 2011, NYRA was charging bettors an extra percentage point on certain exotics wagers, collecting $8.6 million on what is known as the “takeout rate,” or the amount of a bettor’s winnings kept by NYRA.

The report cites numerous e-mail exchanges between Hayward and Daily Racing Form columnist Steve Crist in which they discussed claims that the takeout rates” were outside the parameters of the racing law.” Crist offered his own statement on the DRF website.
 
The overcharging is a problem, to be sure, but where Hayward and Kehoe come in for more serious criticism is the report’s claim, according to The Saratogian, of “damning evidence that Hayward and others knew exactly what was going on and let the overcharging continue” for more than a year.

The trouble facing Hayward and Kehoe may not end with the NYSRWB and their own association. As the Daily News notes: “Robert L. Megna, the director of the New York State Budget and chairman of the Franchise Oversight Board, which oversees NYRA, said he was asking the State Inspector General to look into whether civil or criminal laws had been violated by Hayward and the NYRA.” At a news conference, New York Governor Andrew Cuomo supported an investigation, saying “if the facts are correct, it’s very troubling to say the least. It’s been referred to the Inspector General and we’ll await the report.”

A statement from NYRA chairman C. Steven Duncker addressed the suspension of the two executives and pledged that, “NYRA will take all appropriate steps and actions to cooperate with the State’s inquiries and insure the integrity of our operations.”

Hayward has been the NYRA’s chief executive since 2004, and Kehoe has served as general counsel since 2002.