New York: Clock Ticks, Talks Rage
by Tom Precious
Date Posted: 12/12/2007 6:39:51 PM
Last Updated: 12/14/2007 6:32:43 PM

With closed-door talks failing to produce a deal on a new Thoroughbred franchise in New York, state officials have begun discussing getting the framework of a deal in place before a Dec. 31 deadline with passage of an agreement by the legislature in early January.

The stop-the-clock approach, long a tradition in Albany, the state capital, would include having the New York Racing Association continue to run racing in the interim after its current franchise expires Dec. 31 until a final deal is voted on by the Senate and Assembly.

The idea was first floated Dec. 12 by Gov. Eliot Spitzer. “It’s conceivable that you could have no resolution by the 31st, but we could have agreements that keep us moving forward and a resolution in the first week of January," he said.

“We’ve done that before, so I guess whatever works, works,’’ responded Senate Majority Leader Joseph Bruno, whose district includes Saratoga. “The important thing is that we have continuity, that we have something definitive."

There are obstacles, however, to any deal.

Bruno indicated he could support NYRA continuing running the racing end of the business, but only if it’s board is “reconstituted." Precisely how is unclear, though it would include a new board. Bruno would not say how its members should be appointed.

He also wants a new oversight agency that would be responsible for divvying up other aspects of the franchise. He said the agency could tap “specialists" to run such components as marketing and simulcasting, a potentially lucrative business NYRA insists it must be able to control if it retains the franchise.

Bruno also is talking about a franchise extension of as few as 15 years--half the 30-year deal Spitzer worked out with NYRA in the fall. NYRA officials are said to be adamantly opposed to a shorter timeframe because their deal with Spitzer calls for NYRA to relinquish its ownership claims of Aqueduct, Belmont Park, and Saratoga, thereby giving the state more than $1 billion worth of property.

The Republican legislator also wants a video lottery terminal casino at Belmont, in addition to the previously approved though un-built casino at Aqueduct. Assembly Democrats, however, oppose a Belmont casino.

Bruno also wants a mechanism in place where the franchise-holder’s racetrack operations are formally reviewed every three years by the state. Finally, he wants a deal--he did not elaborate--to somehow incorporate some of the state’s off-track betting corporations under a broader umbrella that would presumably include the franchise-holder.

“Our attitude is NYRA, as we define NYRA, they run racing…Let them run racing, not for 30 years" but for 15 or 20 years, a frustrated Bruno said.

Bruno indicated a broader change to franchise model is needed. “One thing that’s for certain (is) we cannot have a continuance of what has gone on over the last 20, 30, 40 years in this state,’’ he said of NYRA’s operations. He noted NYRA is in bankruptcy court looking for more bailouts from the state.

Despite the disagreements, Bruno said he believes the odds are 2-1 that a franchise deal comes together before Dec. 31.

Still pushing its bid is Australian-based Capital Play, a consortium of racing, gambling, and real estate development interests. Its representatives, joined by their newest lobbyists--John Cordo and Jennifer Cunningham, politically connected lobbyists who have been close to Bruno over the years--were seen going into a meeting in Bruno’s office soon after the lawmaker talked to reporters about the need for a deal on the franchise.

Capital Play is seeking a deal that would let NYRA run the racing operations, but it would control the other aspects of the business, including the simulcasting and casino developments.

The other bidders have been Empire Racing Associates, which has lost much of its key membership, and Excelsior Racing Associates.

NYRA’s role could also become important. If it opposes the deal put together by state officials, it could keep its bankruptcy case alive. That is important because NYRA claims it owns the racetracks, and it could tie up the state’s ability to let another entity run racing until the bankruptcy case plays out.

The developments came as negotiators from the governor’s office and the Assembly and Senate were back at it again behind closed doors at the Capitol the evening of Dec. 12 to try to bring the sides closer.



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