New York lawmakers enter fray affecting NYRA franchise award

Oct 2, 2007 5:33 AM

The battle has begun in New York. Actually, it started months ago but it is about to reach fever pitch.

It may not have the significance of Fort Sumter in 1861, but it is the commencement of what could be a nasty fight over the New York Racing Association (NYRA), whose reputation during the late 1990’s and early 2000’s, suffered under a poorly-operating management team. Annual deficits, unpaid taxes and hanky-panky among mutuels department employees (some of whom were prosecuted) triggered a huge response among groups looking to take over the operating franchise that becomes available on Jan. 1, 2008.

The number of groups seeking the license was reduced to four, under the previous administration. But only one, the existing NYRA management, passed muster with Gov. Eliot Spitzer.

That isn’t the final deciding factor, however. The state legislature now gets its turn.

The legislative hearings have started, and echoes of the losers are being voiced by William Larkin, chairman of the Senate Racing, Gaming and Wagering Committee, who repeated virtually verbatim the concerns of the three losers in the NYRA franchise battle, and others.

Larkin, speaking of the losers (Empire Racing, Excelsior Racing Associates, and Australia’s Capital Play) said, "They say NYRA was there and the fix is in."

The Albany Times Union reports that "Republican senators also raised the possibility of trying to force the Democrat-led Assembly to relent on its opposition to video slots at Belmont Park, which would dramatically increase revenue to the state and Nassau County."

Under the original proposal, slots were to be installed at Aqueduct Racetrack but not at the other two tracks involved in the franchise, Belmont Park and Saratoga.

In that regard, another Senate hearing is scheduled near Belmont in Elmont, L.I., where County Legislature Presiding Officer Judy Jacobs accused Spitzer of "cutting us off at the knees by writing Belmont out of his proposal."

Spitzer’s budget director, Paul Francis, said of the selection process, "In the end, the choice was clear." He and other Spitzer representatives at the first Senate hearing outlined what they considered as shortcomings in the other three applicants: lack of racing experience in New York and greater interest in video slot machines than in racing.

It appears obvious from the political squabbling that there will be no early settlement. This brings out another interesting twist should a deadlock last until the end of the calendar year, a thought that was injected by Karl O’Farrell, who represents Capital Play.

"NYRA ceases to exist at midnight Dec. 31," he said, "and the state owns the tracks."

That is an issue that has been argued vehemently by lawyers representing NYRA. They claim that it is the racetrack operating group that owns the land on which the three tracks sit and they have threatened to take the matter to court to substantiate their claim, thus creating another problem for the state and the continuation of horse racing.

That booming in the harbor presages just what it did in Charleston: a long and bitter fight lies ahead.

And lest we forget: a similar battle seems to be emerging in Massachusetts where Gov. Deval Patrick has proposed the licensing of three casinos and is drafting legislation.

But, powerful House Speaker Sal DiMasi has already expressed "deep skepticism" about the plan and promises a vigorous review, thus probably postponing action to next spring or summer.