ALBANY, N.Y. (AP) -- The New York Racing Association says it has fired CEO Charles Hayward and its chief counsel as the state investigates why $8.5 million in winnings wasn't paid to bettors.

The NYRA board of directors reported the firing of Hayward and senior vice president and general counsel Patrick Kehoe on Friday afternoon. Hayward was paid $475,000 annually, and Kehoe was paid $423,000.

The board says they didn't "perform their duties at a level required by the board."

A state report says NYRA knew it shortchanged bettors by extracting inaccurate "take out rates" from winnings and still did nothing about it. NYRA disputes that claim.

Hayward had said the lapse was an inadvertent error.

NYRA has the state franchise to operate thoroughbred racing at the Belmont, Aqueduct and Saratoga tracks.

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