New York Franchise Still a Question

New York Franchise Still a Question
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Two days after a top lawmaker said he believes New York Gov. Eliot Spitzer has moved away from the idea of awarding the entire Thoroughbred franchise to the New York Racing Association, a plan is kicking around to split the three racetracks among different entities.

Such an idea would likely satisfy Republican Senate Majority Leader Joseph Bruno, who has long pushed for a number of racing companies to get different components of the state’s Thoroughbred franchise. It is unclear whether the idea of splitting up the tracks is something being promoted just by Bruno and some of the remaining NYRA competitors, or if it has been embraced in any way by the Spitzer administration. The Spitzer administration declined comment.

Under one scenario floated in the state capital the week of Nov. 4, NYRA would get the rights to run racing at Saratoga, with the rights for Aqueduct and Belmont Park going to the highest bidder among the various racing entities that have already made a pitch for the franchise. The video lottery terminal casino at Aqueduct would be put out to bid, and real-estate ventures involving unused land at the tracks for hotel and other development, would go to one or more of the development groups already tied to the different bidding entities.

That scenario tracks Bruno's plans for the franchise. But the idea has its detractors.

Some industry officials said the original point of creating NYRA in 1955 was to take away the fierce competition that four racetracks at the time were engaged in for a limited supply of gambling dollars. Going back to a pre-1955 model would again pit Aqueduct, Belmont, and Saratoga against each other in competition for such things as purses, horses, and stakes in an era where the industry is already facing a battle with casinos and Internet gambling. Industry officials and those in the state legislature believe NYRA would block any effort to split up the franchise.

Bruno recently told The Blood-Horse that “productive’’ talks were under way with the Spitzer administration that could lead to a deal by Thanksgiving. He said he believes the governor has moved away from his idea of awarding the racing side of the franchise exclusively to NYRA because he realizes the Senate will not approve that plan.

When asked if the Spitzer administration has been holding firm to its NYRA recommendation, Bruno said: “No, no, no. I think that they’re open. They’re realistic. They understand that this is not going to happen the way they presented it. And, I give him credit for the people around him. They’re very open and they’re communicating in a more realistic way."

The Spitzer administration, however, sought Nov. 8 to strike down the speculation about splitting up the franchise. "It's not something we're looking at,'' said Jeffrey Gordon, a spokesman for Spitzer. He declined to elaborate.

Bruno has proposed the idea of a new state authority to oversee the franchise, with the power to award the track franchise to one or more groups. His authority would be led by Republican appointees--considered a non-starter for the Democratic governor.

NYRA officials, who have been in contact with Spitzer’s office since being recommended by the governor, were unaware of any support by Spitzer to split up the franchise.

“We’ve not had any discussions that would lead us to believe that is a real option,’’ NYRA chairman Steven Duncker said.

The franchise issue is not standing on its own. A whole slew of unrelated issues--from new construction projects and tax cuts to a possible pay raise for legislators--are all linked in a classic Albany-style way and could be part of one big package the governor and legislature approve before the end of the year. Or, nothing could get done.

Bruno said Nov. 7 it is “50-50’’ whether a deal is put together by Dec. 31, the date NYRA’s current franchise expires. NYRA, which in bankruptcy court claims it owns the tracks no matter what happens to the franchise, has recently threatened to shut down racing in January if a deal is not struck.

NYRA has a major stick over the state: bankruptcy court. If a deal is made in Albany that is unsatisfactory to the NYRA board, it is likely NYRA will simply go back to the federal bankruptcy court judge in Manhattan overseeing its case and let him decide such major issues as who owns the racetracks--decisions that could affect the overall franchise debate.

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