- Excelsior was full of surprises at Wednesday's hearing. For one thing, they showed up. The group had been mum about their plans to do so, muttering instead about slots at Belmont being a condition of their continued involvement. But they were there, and they brought Jerry Bailey with them.
The biggest surprise however, was treated as a mere footnote in the press reports; it was in the second to last paragraph of Matt Hegarty's comprehensive report that it was revealed that one of its major partners, Richard Fields, has dropped out of the company. Excelsior is now quite a different entity than it was back in the days of Fields and Steve Swindal. Who's running the show now isn't really clear - Steve Wynn has been mostly silent; Richard D. Bronson was referred to as the "development leader" by the Times-Union's James Odato, who wrote that he stunned the crowd with the announcement of Fields' departure. Given Excelsior's current makeup, it seems a bit surprising to me that they would bring Bailey in to make a pitch for the racing; and, quite frankly, even more so that Bailey would continue to recommend them as the most qualified to run the tracks.
Fields' withdrawal, of course, deprives the Republicans of a major squawk box should Governor Spitzer cut Excelsior in on the casino. But while it gives Spitzer a green light to do so, a skeptic would say that now, with a major contributor no longer there, he doesn't have any reason to!
You may have read by now about the sharp exchanges between Charles Hayward and Republican Senators, some of whom expressed outrage at what they took to be NYRA's threats to shut down racing. NYRA didn't characterize it quite the same way, asserting that the bankruptcy court may not allow the state to operate the tracks while the land claim issue is not settled. Haywared warned against a “slippery slope with a bad outcome that NYRA and the Legislature might not control." [Bloodhorse]
But Matt Hegarty's latest report shows, I think, where this process is ultimately going.
The New York Senate is considering a proposal by state Sen. William Larkin that would change the breakdown of slot-machine revenue at the Aqueduct casino, awarding the casino operator a larger share and the New York Racing Association less, legislative officials said. Larkin's proposal would alter the terms of a 30-year extension of NYRA's franchise to run the state's three major racetracks that is supported by Gov. Eliot Spitzer and the state's Assembly. [Daily Racing Form]It's the first time I've heard the Republicans discuss altering the terms of the agreement, and in doing so acknowledging that NYRA will be the racing operator, rather than disputing the selection of NYRA itself. Personally, I would feel safe in going ahead and making plans to spend your New Year's Day at the Big A. Senator Bruno kept talking about getting the other bidders involved, and specifically mentioned Churchill and Magna. But now that they, Delaware North, and, according to this commenter, Woodbine are all gone, perhaps this story is an indication that Bruno and the GOP are ready to accept reality and get down to the gritty details.
However, the substance of the counterproposal is certainly alarming. Excelsior and Mohegan Sun, Capital Play's casino partner, told the committee that they would not bid for the racino unless the rates are higher. That would mean less money for the horsemen and for capital improvements.
"What's the point of giving a subsidy to a company that is taking $20 million from the taxpayers each year?" [Sen Larkin's counsel Steve] Casscles said, in reference to recent financial losses for NYRA, which filed for bankruptcy late last year. "They'll just keep losing money."He's of course missing the point that anyone would lose money under the current business model in the state, and reminds us again that nothing is being done to change that model. I'm starting to see a gloomy scenario in which New York racing just sputters along on crumbs it gets from slots with only modest improvements in purse money and infrastructure.
If the OTB's are not merged into the racing operator now, at this definitive point in time (which it obviously won't), what possible incentive will there ever be for Albany to tackle it later? As long as NYRA is surviving in one way or another (whether through subsidies or not), racing continues and enjoys its annual renaissance in Saratoga, the state gets its takeout, Spitzer gets his slots money for the budget, local communities get their regional OTB money, politicians retain their patronage outlets and the well-connected their jobs....then really, why would the system ever change?