New York THA Breaks From Empire Racing

The New York Thoroughbred Horsemen's Association is breaking its ties with Empire Racing Associates.

The New York Thoroughbred Horsemen’s Association is breaking its ties with Empire Racing Associates, a move that will further throw into confusion the process for naming a franchise holder to operate Aqueduct, Belmont Park, and Saratoga.

The announcement by the group came just one day after criticism by the New York State Inspector General of Empire Racing’s bidding package. Industry sources said a decision has been made to withdraw, but final paperwork is still being prepared.

In a July 3 letter to Richard Rifkin, Gov. Eliot Spitzer’s counsel on the racing franchise matter, Empire Racing officials conceded the departure of the New York THA. Empire Racing said state procurement rules kept the New York THA rom meeting with members of the governor's staff on non-franchise issues.

“We are sympathetic to the fact that New York THA has a number of pressing issues, unrelated to its interest in Empire, which it must be free to pursue and advocated for in Albany," said the letter from Jeff Perlee, Empire Racing chief executive officer.

Perlee said members of Empire Racing's board who are also on New York THA board will choose one of the two groups with which to remain as members. He said Empire Racing is considering taking the New York THA share in the franchise-seeking entity and assigning it to a trust “designed to facilitate the development of equine related economic development projects" in New York.

Empire Racing said it is also offering an additional membership opportunities for $350,000, which will be offered to existing members or to outside groups so long as they are members of the New York THA or the New York Thoroughbred Breeders Inc., or have made a “substantial contribution" to the Thoroughbred industry.

Empire Racing also took the opportunity in the letter to Rifkin to criticize portions of the Inspector General’s report issued July 2, saying there are a number of factual errors that, unless changed, “could paint an inaccurate and misleading picture for decision makers going forward." The letter did not provide specifics.

New York THA president Rick Violette declined to comment on the situation July 3.

The horsemen’s group, according to the report by the inspector general, who reports to Spitzer, has a 3% interest in Empire Racing, whose corporate partners include Churchill Downs Inc., Magna Entertainment Corp., and Woodbine Entertainment. The state report, which criticized of all four bidding groups in an “integrity’’ review of the entities vying for the franchise now held by the New York Racing Association, said 38 individual horsemen are also involved with Empire Racing.

But the report said the New York THA has no direct financial interests in Empire Racing other than its board last year voting to endorse the Empire Racing bid.

“For the present, the weight of the evidence supports the conclusion that Empire was not created by New York horsemen for the benefit of New York horse racing,” the inspector general’s report said. “If Empire were awarded the franchise, the horsemen would likely lose control to the investors representing out-of-state Thoroughbred horseracing interests--Canadian-based Magna Entertainment and Woodbine Entertainment, and Kentucky-based Churchill Downs.”

The inspector general's report, however, made no recommendations on which group should get the franchise.

Spitzer’s administration has floated a plan to give another 20-year franchise to NYRA to run the racing side of the business. It has been eyeing turning over the gambling portion--including possible video lottery terminal casinos at Aqueduct and Belmont--to Excelsior Racing Associates, whose partners include casino developers Steve Wynn and Richard Fields.

The administration also is considering a plan to end racing at Aqueduct, sell part of its valuable real estate, and still build a VLT casino on a portion of the land. The idea has been met with resistance in the state legislature, which needs to give final approval to a next franchise holder.

The franchise, held by NYRA since 1955, expires Dec. 31.