Magna awaits OTB action

Dec 24, 2001 12:46 AM

Before the September terrorists attacks, Frank Stronach’s Magna Entertainment Corp. (MIEC) appeared to be on the inside track to purchase the New York City Off-Track Betting Corp. After all, the company had the blessing of Mayor Rudy Giuliani whose idea it was to sell off the pari-mutuel operation he once described as “the only bookie that loses money.”

That really hasn’t been the case in recent years primarily because of changes fostered by Giuliani that turned the betting shops into a profit-making, $1 billion industry. That’s when Mayor Rudy decided the city should get out of the business and auction the betting facilities to an experienced operator.

Initially, there were six bidders in the hunt but by the time the serious bidding began there really were only two.

Magna Entertainment won out over the N.Y. Racing Association (NYRA), causing a political storm. Before any further action could be taken, however, the World Trade Center attacks put the sale on the back burner.

Now Giuliani is leaving office and he is being succeeded by billionaire Michael Bloomberg whom Giuliani endorsed. Bloomberg’s election was hailed by Stronach as portending the best for his company. Still, there remains a strong political force in Albany that favors NYRA and its chairman, Barry Schwartz, who became both wealthy and famous as the man behind popular designer Ralph Lauren.

Because of it, the political scenario remains clouded. It still hasn’t been determined whether Bloomberg will continue with Giuliani’s plan to spin off the city’s betting shops or whether he will acquiesce to union demands and maintain status quo. And if he should go forward, will the matter ever get through the legislature?