It sounded so nefarious last week when Empire Racing Associates accused its competitors for a New York racing franchise of conducting sneaky meetings to carve up future revenues.
Empire Racing, whose major partners are Churchill Downs Inc. (CHDN) and Magna Entertainment Corp. (MECA), is one of four groups bidding for a 20-year racing franchise to operate New York State’s three biggest racetracks. An added bonus will be the ability to set up a slots operation at one of more of the tracks.
Two of their opponents are Excelsior Racing Associates, a group that includes a number of prominent horsemen as well as recognized developers and casino operators such as Richard Fields and Steve Wynn, and the current franchise holder, New York Racing Association (NYRA).
All three, plus an Australian-based company, have been waiting for Gov. Eliot Spitzer and other politicos to choose the winning bidder.
But last week, Empire yelled "Foul!" by alleging that officials from NYRA and Excelsior were meeting secretly to discuss a plan in which NYRA would continue as the racetrack operator while Excelsior would have first dibs on the slot machines that state lawmakers have authorized.
In a letter to state officials, an Empire representative even identified a pair of participants in the meeting(s) as NYRA President Charles Hayward and Fields, the Chicago developer who recently bought a majority interest in Suffolk Downs in Massachusetts.
As expected, an Excelsior representative described the allegations as "unequivocally and completely false."
Empire meanwhile demanded that both NYRA and Excelsior be disqualified from consideration for the franchise since the meetings "violates the spirit of competitive bidding and fair competition set forth to ensure the integrity of this process."
Some observers said they failed to see that even if such meetings were held there would be any violation of laws.
They also noted that such a union between NYRA and Excelsior might help alleviate one problem that remains unresolved: the issue of who holds title to the land on which the three tracks — Belmont, Aqueduct and Saratoga — are situated. NYRA has insisted all along that it owns the land while many state officials have declared the land belongs to the state.