Schwartz on OTB Sale: It's NYRA or Nothing

Schwartz on OTB Sale: It's NYRA or Nothing
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NYRA chairman Barry Schwartz.
New York City Off-Track Betting Corp. falling into the hands of a consortium led by Magna Entertainment would be "an affront" to the entire racing industry, the head of the New York Racing Association charged.

With weekly rumors that Magna is in line to get the coveted OTB corporation, NYRA chairman Barry Schwartz made his remarks after he confirmed that NYRA has dropped Churchill Downs and the TV Games Network from the consortium created to purchase the operation.

"I know there's no question NYRA should get OTB," Schwartz said. "NYRA should own OTB just like every other racetrack elsewhere own their OTBs. A decision to give this property to the Magna group would be the most ridiculous decision in the history of the city of New York, and everyone knows it."

Officials with the Magna consortium, which includes Greenwood Racing, have been unavailable for comment the last few days.

In search of cash partners, NYRA teamed up with Churchill and TVG earlier this year when the city required interested groups to pay at least $250 million in cash for NYCOTB. But problems within the Giuliani administration -- everything from mounting union opposition to the mayor's soap opera-like distractions of his dissolving marriage -- have delayed the bidding process far longer than anyone every anticipated.

The Giuliani administration recently asked the final two bidders to re-submit scaled-down proposals that would not require major changes in state law, such as NYRA's demand for a big franchise extension or Magna's demand for changes in simulcasting statutes. All of that, though, made NYCOTB less valuable.

As a result, Schwartz said NYRA went back to its original submission before it hooked up with Churchill and TVG. The NYRA plan features a large down payment and a payout over a number of years.

"On a bid like that, we don't need any partners," Schwartz said.
If it wins the bid, Schwartz said Churchill, which had bid for NYCOTB before it joined with NYRA this year, would still likely get some sort of minority ownership in NYCOTB as a way of providing both racing entities with better products.

"They've got a group of racetracks we think would fit with ours," Schwartz said.

As for TVG, Schwartz said the company would still be a part of a NYRA-owned NYCOTB operation to handle interactive wagering.

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