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Friday, June 15, 2007

NYRA-Excelsior Combo Reported

- Tom Precious, who works for the Buffalo News and provides reports on the New York franchise situation for Bloodhorse.com, obviously has a mole with inside knowledge of the proceedings, as he has been the first to break major developments such as the proposed closing of Aqueduct. Now, he confirms what has long been suspected - that the Spitzer administration has "floated a plan" for NYRA and Excelsior to run racing and slots respectively. The proposal, floated in a private meeting by aides to the New York governor and negotiators from the Legislature, includes NYRA giving up its land claims to the three tracks.

The report claims that Excelsior was the only bidder willing to work with NYRA. I suppose those accusations we heard from Empire a couple of weeks ago about the two having colluded aren't going anywhere, and that wouldn't be the first time that an assertion made by the group fades away quietly.

There are also apparently rumors that Spitzer will try and ram a deal through the Legislature before it adjourns on June 21, but Precious reports that that scenario is "unlikely." The alternative to this deal should it not be accepted by lawmakers could be a complete do-over (oh man...), which would naturally involve a short-term extension for NYRA.

The development comes after a day on which Empire held a news conference to criticize the concept of splitting the racing and VLT operations into two.

“We can’t allow these VLTs to be put in the hands of some out-of-state casino interest,” [Empire VP Dennis Brida] said. “Separating it out and auctioning it off to a gaming operator … is not only unfair, it’s wrong. We don’t want to hand them a 20-year franchise and then be begging at their feet for the scraps that are left over. [Thoroughbred Times]
Empire related the concept to the failed OTB model in which the off-track corporation competes with and cannibalizes the live product. Don’t repeat the OTB mistake, their press release pleads. That may be good PR, but it seems to me that it doesn't apply here. Such an arrangement between NYRA and Excelsior would presumably be complimentary rather than competitive, and the revenue split will certainly be set by law.

Capital Play issued a release late in the day which trotted out the old accusations against NYRA, detailing all of its past transgressions, including the much-ridiculed "weight-gate" indictments. It includes some cheap shots utilizing old quotes from Spitzer and the disgraced former Comptroller Alan Hevesi, and a fresh dig regarding the poor attendance at the Belmont last weekend.

The two frustrated bidders, each of whom, according to Paul Post, writing for the Thoroughbred Times, have spent in excess of $3-million preparing their bids, are striving for the best sound bites here, but are missing a main point, probably because they know it will fall on deaf ears. And that is that NYRA simply didn't do the work that they did. Unlike the other bidders, their proposal lacked any kind of vision or coherent plan for the future, instead relying on repeatedly pointing out their own experience running the tracks. It seemed almost as if they didn't even put much effort into it, submitting a series of sloppy documents instead of slick brochures. Perhaps they felt that their claim to the land put them in a position in which they didn't need to devote much energy or time (and money) to the process. And they may have been right.

9 Comments:

Anonymous said...

"floated in a private meeting by aides ..."

So much for the transparency in decision making promised by Governor Spitzer.

Anonymous said...

Alan, the NYRA-Excelsior "exacta" seems to make a lot of sense, as you and I have been saying for months, and as you have pointed out again in this post. And more than a little inside power politics on NYRA's part by invoking the "golden rule": He who has the gold rules, in this case, title to the 3 tracks! But we haven't heard about any plan for bringing the OTB's into the fold, lower on track pari-mutuel taxes, and other much needed reform of the state racing and wagering laws. That's an awful lot to do with less than a week to go, isn't it? /S/ Green Mtn Punter

alan said...

>>But we haven't heard about any plan for bringing the OTB's into the fold, lower on track pari-mutuel taxes, and other much needed reform of the state racing and wagering laws.

No, not a peep (and I think we can forget about lower pari-mutuel taxes for now). There were reports that Pataki tried to ram through the Ad Hoc Committee's recommendation in the closing days of his administration, and I think these reports of any imminent deal will similarly go by the wayside.

Late Scratch said...

These two quotes from today's Saratogian:
"Candidate Eliot Spitzer declared last fall that the state owns the racetracks and that he wouldn't let New York Racing Association use its ownership claim as leverage to extend its franchise beyond Dec. 31."


"Hayward said Spitzer's office has not contacted NYRA, formally asking it to continue running the state's tracks.
"We have heard nothing about any details of that plan," he said."

Dr House is right - everybody lies.

alan said...

>>"Candidate Eliot Spitzer declared last fall that the state owns the racetracks and that he wouldn't let New York Racing Association use its ownership claim as leverage to extend its franchise beyond Dec. 31."

I guess the land issue was not the slam dunk for the state that most experts felt that it was.

Anonymous said...

You have to remember that VLT revenue is split between the State and the VLT operator. NYRA will no longer have anything to do with the VLT program therefore they will get nothing from VLTs. The horsemen and breeders will get a small percentage from the vendor's fee (operator's VLT revenue) but that is it.

Additionally, NYRA (the racing entity) remains not-for-profit thus if they get anything it will be a small piece in order to cover operating expenses. The question then remains how does NYRA pay for backstretch improvements, polytrack, or any other thing that costs money? The separated VLT operator (who will be making money) is not going to want to foot the bill.

Empire may not be the best choice for bettors but give Brida credit for pointing this out. If VLTs and racing are separated that only hurts New York racing. Leave it to New York State government to take something that is already screwed up and make it worse!

alan said...

>>You have to remember that VLT revenue is split between the State and the VLT operator. NYRA will no longer have anything to do with the VLT program therefore they will get nothing from VLTs. The horsemen and breeders will get a small percentage from the vendor's fee (operator's VLT revenue) but that is it.

Valid points all. There will have to be a percentage of VLT revenue allocated to NYRA for capital improvements including the backstretch or else it simply doesn't work (not to mention for marketing). Since this is a different model from the usual one in which the track and VLT operator are the same and simply split revenue with the state and horsemen, there will also have to be a different way to distribute the revenue and include the track operator. If there isn't, then I would be totally in agreement (for a change) with Empire in this case.

jk said...

Spitzer already has egg on his face over this trial baloon. On day one, everything changes. Yeah right.

It does not make sense NYRA would give up its land claim for a 20 year extension. The land is too valuable to give away. If NYRA really owns the land, they can tell NY State to take a hike.


http://www.nysun.com/article/56687

Big Spitzer Donor In Line For Lucrative State Deal

Anonymous said...

Spitzer throws out the agreed upon set of rule for choosing a franchise operator, then tries to ram this Empire/NYRA marriage down the Assembly's throat. NYRA has run this franchise into the ground, and that includes the Hayward regime too. Keeping NYRA intact to operate these tracks is only asking for more of the same crap - a terrible experience going to the track. Saratoga runs itself.
"So much for the transparency in decision making promised by Governor Spitzer." Ain't that the truth.