'Friends' Releases Legislative Proposal for Racing

New York should permit public and private partnerships to bid on the New York Racing Association franchise, allow bettors to wager via computers, introduce frequent-betting rewards programs at tracks, and approve the merger of the state's off-track betting corporations, according to an ambitious legislative package proposed March 9 by Friends of New York Racing.

The legislation follows in line with proposals already made by the organization that includes an array of New York and out-of-state racing and gambling interests. The group, headed by former National Thoroughbred Racing Association commissioner Tim Smith, is shutting down its operations after spending more than a year studying the condition of the state's racing industry.

"Its passage would lead to a better business model for New York racing, and thus strengthen the upcoming bids for the current NYRA franchise," Smith said in a statement. "Most importantly of all, this legislation would increase purses, improve breeding farm economics, and help assure the future viability of the industry in New York."

The industry wish list of legislative ideas comes as the state has a process under way to award a new franchise to operate Aqueduct, Belmont Park, and Saratoga. NYRA's franchise expires at the end of 2007.

While a state panel charged with overseeing the franchise bidding process is meeting and making some recommendations, it appears to be increasingly possible lawmakers will punt on making a franchise decision this year or approving wholesale changes to the state's racing laws. Most industry groups claim the laws need to be dramatically altered to give a new franchise holder a better shot at making money at the tracks.

The 20-page legislative package proposed by FNYR includes expanding beyond telephone the means by which New Yorkers can conduct racetrack account wagering to include computers and other electronic means. It would let all tracks have loyalty rewards programs for big bettors; NYRA has had such a proposal pending before a state regulatory agency for a year.

The legislative package would expand the list of places with video lottery terminals to Belmont; current state law does not allow VLTs at either Belmont or Saratoga.

The group also wants to "rationalize" how bets are taxed by New York so the pari-mutuel tax is applied to takeout, not handle. It is calling for 5% of the tax receipts go to compulsive gambling programs, and that the state drop its tax on tracks and OTB corporations to fund the activities of the state Racing and Wagering Board and take the money instead out of the pari-mutuel tax.

The legislative package would put in law the creation of a new, non-profit group--the Horseracing New York Corp.--"to encourage cooperation among participants in the horseracing industry for the creation of a strong future for horseracing in this state." It would be funded by a one-tenth of 1% assessment on VLT revenues received by tracks, horsemen, and breeders; OTB corporations would also contribute funding for the group. Some money would go to the Albany Law School's racing industry think tank, which helped develop the legislative package.

"The current business structure is 50 years old, and not surprisingly needs updating," Smith said. "Balancing the needs of racing as a sport and racing as a business will be of critical importance. We think our proposed legislation is a good first step in that direction."