NY Racing Bill Blocked, Republicans Claim

New York Republican officials are growing increasingly frustrated with Democrats who run the Assembly for blocking a measure to overhaul racing regulation and setting up a new state monitor to oversee the operations at the troubled New York Racing Association.

Sources said there has been some talk within Gov. George Pataki's administration of jump-starting the process to put NYRA's franchise out to bid earlier than now scheduled. By law, if it is to put the franchise out to bid, the state must begin the process a year from now. Frustrated negotiators have considered starting the process now, and not waiting until the fall of 2005.

Republicans said the Assembly is also costing the state $35 million a month, the amount New York is expected to get from the future video lottery terminal casino scheduled to operate at NYRA's Aqueduct facility.

"It's important to get it done,'' Senate majority leader Joseph Bruno, said of the racing measure. Bruno, the Legislature's top Republican whose district includes Saratoga racetrack, said he is not examining any plan to move up the franchise bidding process because of the stalemate with Assembly Democrats.

Bruno's comments came two weeks after he quickly pushed through a measure proposed by Pataki to dramatically overhaul how racetracks, casinos and other gambling ventures are regulated in New York. The measure also denies NYRA's bid to get its franchise, due to expire the end of 2007, extended until 2010.

NYRA had insisted the extension was needed to get the VLT parlor planned for Aqueduct under construction. The extra years were needed to ensure its partner, MGM Mirage, would have enough time to get its financing for the project -– estimated at $140 million – paid back.

Instead, the measure calls for permitting MGM, or whoever does run the VLT operations at Aqueduct, to remain as the VLT partner even if NYRA loses its franchise in 2007.

Additionally, the Pataki bill creates a new state oversight panel to monitor NYRA's operations. Supporters say that provision is needed because of NYRA's many legal and financial problems over the past several years. NYRA is already operating under the eyes of a court-appointed monitor as part of a deal in which the U.S. Attorney's office won't prosecute NYRA – for its role in a tax fraud scheme – if it stays out of trouble for 14 months.

But the Assembly has so far blocked the measure, saying much of it is unnecessary. Legislative sources say the Assembly is concerned about creating another entity to monitor NYRA – especially one controlled mostly by Pataki – when NYRA is already being scrutinized by the court monitor as well as by the state comptroller, state attorney general's office and others.

In addition, the Pataki plan creates a new state agency to regulate tracks, racinos, casinos and charitable gambling ventures. The panel, created by the collapse of several state offices, including the state Racing and Wagering Board, would be controlled by Pataki appointees, another sore point for Democrats who run the Assembly.

"We ought to get the bill done. It's a good bill,'' Bruno said.

The bill makes it less likely that NYRA's franchise will simply be extended without competition, as it has been in past years. The NYRA oversight panel is charged with looking at a number of issues, including whether to turn Aqueduct, Belmont and Saratoga over to a for-profit entity. Magna Entertainment has been circling NYRA for several years eager to get control of the New York tracks.

Sources say there is growing concern within Republican ranks that Assembly Democrats are trying to protect NYRA's franchise by blocking the Pataki measure. It is unclear if Pataki could, on his own, speed up any bidding process for NYRA's franchise. But officials at the Capitol said there has been talk among government officials about making a move on NYRA's franchise sooner if the Assembly doesn't act on Pataki's racing measure during the current legislative session.

Democrats, speaking privately, dismissed the threats, saying Republicans were merely trying to pressure a quick resolution to a measure that was only introduced three weeks ago. The Legislature's 2003 session technically ends next week, though unresolved budget issues promise to keep the session going for some time.