Updated: Tuesday, August 28, 2001 9:44 AM
Posted: Tuesday, August 28, 2001 9:44 AM
A few weeks ago, it was suggested here that the inquiry light should have been blinking the minute Mayor Rudolph Giuliani announced his intention to sell the New York City Off-Track Betting Corporation to a partnership of Magna Entertainment, Greenwood Racing, and developers Robert C. Baker and William Mack. The same thing would have been said if Giuliani had tabbed any out-of-state company--Churchill Downs, for example--to own an OTB system that would be in direct competition with the New York Racing Association.
Not long after Giuliani announced his decision, Daily Racing Form reported that Magna chairman Frank Stronach said he would eventually try to win over the NYRA franchise. The license to operate the franchise expires at the end of 2007. Stronach made his remarks during a law conference held in Saratoga Springs, N.Y.
It makes sense for live racing and off-track wagering to be conducted by the same company, which is why the New York legislature should construct a roadblock to stop the sale Giuliani recommended. The legislature should also look for a way to link all of the state OTB operations with the franchise that conducts live racing--no matter who that license holder is.
By the time the state begins the license renewal process, Magna will have had an extensive track record for New York's decision-makers to review. Magna purchased its two biggest tracks, Santa Anita Park in Southern California and Gulfstream Park in South Florida, in 1998 and 1999, respectively, and Stronach has spoken at length about his plans for major renovations at both facilities. To date, the improvements have been limited to Santa Anita, where a length-of-the-stretch restaurant has been added to the top floor of the grandstand, along with aesthetic improvements to the track apron and the installation of a large-screen television in the infield. There is continued talk of a new stable area, expanded main track and turf course, and a horse-themed entertainment center to be built on the Santa Anita property, but Stronach will have an uphill battle getting the approvals from the city council of Arcadia. Magna's resolve to renovate Santa Anita has led the company to tell the Breeders' Cup it probably would not be able to host the World Thoroughbred Championships in 2002.
There doesn't appear to be a timetable for changes at Gulfstream. Previously announced plans are for expansion of the main track and turf course and construction of a new grandstand. Expansion would cause many of the barns and dormitories to be razed, limiting the number of horses that could be stabled at the track. To offset the loss of on-track stabling, Magna has purchased property near Boynton Beach, where a training center is proposed. Plans to construct housing for backstretch workers there could be jeopardized by zoning restrictions. So, all of the pieces in the South Florida puzzle do not fit together yet.
Critics have said Stronach is all talk and no action, but it's too early to say he hasn't fulfilled his promises. Let's not forget that Santa Anita was owned by a real estate investment trust with no interest in operating a racetrack and Gulfstream's parent was a Japanese company that very well could have sold the property for development purposes. Stronach's commitment to live racing has never been in doubt.
What he does next at Santa Anita and Gulfstream will go a long way toward defining Stronach's place in the industry. If he follows through on his promise to upgrade the facilities and make live racing more successful, then guess what? He deserves a fair chance to be considered for the racing and off-track wagering franchise in New York.
Until then, it makes no sense to award New York City OTB to Magna, Greenwood Racing, Churchill Downs, or anyone else. It belongs with the organization that operates the state's racetracks.
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