With no dough in the till, NYRA’s future cloudy

Oct 11, 2005 4:04 AM

Those who believe that owning a racetrack is a road to riches, paved with gold, must have been stunned last week to discover that the New York Racing Association, serving the largest metropolitan market in North America with two tracks, and owning a third at storied Saratoga Springs, is busted.

Flat broke.

The most frequent charge leveled against NYRA and the people who run it is ineptitude, but it really goes farther than that. It is a combination of mismanagement and restrictive laws, of too much racing even in a huge market like New York City, and a sea of changes in technology and communication that have inundated racing in markets east and west.

After NYRA announced last week that it was planning to sell off the equine art treasures given to it over the years, and that it also needed to sell some 80 parcels of land it thinks it owns in areas surrounding its New York racetracks, the vultures drifted down to pick at the carcass.

NYRA thought it owned the 80 parcels because it holds the deeds, or says it does, and because it has been paying taxes on them.

The state of New York, through its politically powerful entities, says the land in question is owned by the state — or by taxpayers, as it prefers to put it — and that NYRA can’t sell it without permission, which may or may not be given.

NYRA, meanwhile, says it needs $20 or $25 million, and needs it right now, or the till will be empty by the third week in November, little more than a month away.

In its time of dire need, NYRA suddenly looked up and saw its friendliest face in Albany, the state capitol, snarling at it. Joe Bruno, who runs New York, not with the trappings of governor but from his all-powerful post as majority leader of the New York Senate, suddenly turned against NYRA, which he has long defended.

Bruno offered to obtain short-term help and financing, but announced that the way NYRA was handling things was no way to run a business. He said he would urge the governor, George Pataki, and the leader of the House, Sheldon Silver, to join in drafting emergency legislation in an upcoming special session that would bypass the two years left on NYRA”˜s franchise to run its three tracks, Aqueduct, Belmont Park and Saratoga.

That franchise does not expire until Dec. 31, 2007, but Bruno wants it ended now, and put out for accelerated bid to private ownership.

Why now?

Largely because Aqueduct is in line to receive slot machines.

The law is in place, casino financing has been arranged, banks are willing, and the iron is hot. Magna Entertainment and Churchill Downs and other major racing enterprises are standing in line, ready to bid on a franchise, individually or collectively, that is worth — what? — $300 million or more, easily, as a racino. Aqueduct is located on a barren plain, surrounded by drab plainness, but it has public transportation to its door and millions of needy souls ready to pull the handles or push the buttons of gambling machines.

So Joe Bruno last week called a press conference, saying he would help but he wanted a hasty change in management policies, either by NYRA running things on a new policy track, or from private enterprise with experience in running racetracks and casinos.

Late in his press conference, a reporter with fortitude confronted the all-powerful Bruno with an all-encompassing question. Since Bruno’s son Kenneth was employed as a $15,000 a month lobbyist in Albany — Bruno’s domain — representing Magna Entertainment in its quest for the NYRA franchise, wouldn’t Bruno’s haste in calling for effectively a change in franchise represent a conflict of interest?

Bruno bristled, and called it "a dumb question."

What’s dumb about it?

The only thing dumb is that the answer is obvious, and the question does not even need to be asked.

So NYRA, strapped and forsaken, now must fight for its life without its savior. Its days seem numbered, and before too long private enterprise will take over the country’s most valuable racing franchise, impoverished but with slots just ahead.

Once those slots arrive, NYRA will be worth the fortune that many thought, mistakenly, that it was all along.