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Friday, February 27, 2009

Shakeup Good For Gov, Bad For Horsemen

Governor Paterson has engaged in a major shakeup of his staff in an attempt to get his administration, and his re-election hopes, back on track. The Times reported that he has turned largely to veterans of the Clintons’ far-flung network to try to steady the situation.

“These people are battle-tested in national politics,” said George Arzt, a Democratic political consultant in New York. “It’s a team to be reckoned with, for the first time since David took over.”

They will add to an already growing Clintonian flavor in Mr. Paterson’s camp. Another Clinton veteran, Harold M. Ickes, the former White House deputy chief of staff, has also been advising Mr. Paterson in recent months.
We know that racing has not been a high priority for this administration in the first place, and, as Paul Post reports today in the Thoroughbred Times, this kind of shakeup is not going to help the industry get its attention.

Post also discusses the proposed changes in the VLT splits at Aqueduct in Paterson's plan for a racino at Belmont.
Under that plan.....horsemen’s and breeders’ revenues from Aqueduct would be cut in half.

Currently, horsemen and breeders are slated to get 1% and 7% of revenues, respectively, the first year and increasing to 1.5% and 7.5% in year three and beyond. [Actually the other way around.]

Paterson says the groups only need half that amount because a second racino at Belmont would result in twice as much money. Horsemen and breeders disagree, however, saying that competition from a Belmont racino, only eight miles from Aqueduct, might reduce overall gross income.

“These cuts, if enacted, would be devastating to Thoroughbred racing and breeding,” said Edward Bogdan III, managing partner of Albany-based Bogdan, Lasky, Kopley, LLC, a long-time lobbyist for New York Thoroughbred Breeders Inc. “While we would like to see more VLTs in the state, that proposal is no good for us.” [Thoroughbred Times]
Paterson's position is, first of all, overly simplistic in its assumption that two racinos necessarily equals twice the revenue. Worse for the industry, if I'm understanding him correctly, the governor is basically fixing the amount of revenue that horsemen "need" in his view. That would be a dangerous precedent, one which would no doubt be applied in the event that racino gaming ever expands to table games. Would he, or his successor, then claim that the percentages could be cut even further because the horsemen don't "need" the extra revenue that such games would presumably generate? And how about Delaware North....why do they "need" the extra money as opposed to the horsemen?


Anonymous said...

Incredible. "Patsy" goes to old Clintonites to help save his arse. next thing we know, Howard Wolfson will be back with Richard Fields and his Excelsior mates in tow telling us all why Belmont Park should be developed in concert with folks that support the Dali Lama! Don't forget that Fields paid a fine to the tune of $8,000 or so for jetting around then LT Gove paterson on his plane when he wasn't supposed to. I agree with Alan; perhaps good for David's office, but not good for horse racing.

Anonymous said...

Does not matter who what when or where, it will not be good for horsmen, that's for sure.

Fantasies of 100k maiden races have turned to nightmares.

Anonymous said...

All the well intended people that were going to make NY racing something to be proud of were eliminated by the farce of a process. The NYRA has no chance to succeed on its own if it must be monitored and advised by others in control. Empire, Capital Play and S.L Green meant to do more for racing than the curent debacle between the NYRA and DelNorth. Where is Sabini and why is he not weighing in other than supporting the "new" Belmont Park development? Is he still political, or his he actually looking out for NY racing? The true death march for NY racing comes if the old Excelsior team is recruited to develop the Belmont property.

Where are the NY horsemen and breeders durting this critical period? Poorly represented and NYRA biased is my guess.

Anonymous said...


The only thing that is poorly represented and missing is the sad Government in NYS~

VLTs were passed by the state for Aqueduct in 2001, that's right 2001! 8 years ago. Because of political ties and Gov debacle we are here as we are today.

Gov awards an operator in Del North back in the fall of 08. However is creating issues by introducing a new twist into the mess, Belmont VLTs. The Gov can not close on the deal with Del North and get the State the $370M upfront payment because of this new proposal for Belmont. Del North, and who blames them is concerned with another VLT operator 8 miles away. Of course they would be. It would steal their business. So they want some security if Belmont goes. And that's a BIG if.

The big key to this is the fact Patterson put the $370M in the 09-10 budget, hence something has to give before the budget is approved. Basically Belmont being off the table for now.

Therefore, you have the Gov screwing all this up once again.

Those involved in industry are working this, however when the Gov's office is a screwed as NYS much lobbying only goes in one ear and out the other. Its all behind the scenes as you should know.

Anonymous said...

Oh forgot to mention NYS is loosing $1,000,000 a day in VLT revenue every day Aqueduct is not opened.

Ya, $1M a day. I heard NYS has a deficit, right? $1M a day since 2001. Interesting...thing.

Industry breeders, horsemen are loosing, tax payers are loosing, $ slotted for education, $ slotted to improve capital improvements, purses, and those who like to hit the VLT button are loosing.

Thanks Patterson.

steve in nc said...

I give up on this stuff. And with the economy sinking, my money says we see no slots at NYRA tracks for at least 3 years. With approval 8 years ago and no results, there's enough blame to cover everyone in both political parties.

So for diversion and cause for optimism, let's look at others' disasters: What might happen when Magna either finally goes belly up or has to sell its tracks for not so much in this depressed real estate market?

Would purses go down seriously at those fine tracks? Might we see NY purses suddenly looking better in relative terms and better horses shipping in? Might we start getting better sires in NY than Wheelaway, so NY Bred races start looking less like 3-legged races? Or am I dreaming? (hey it is just past 5 a.m.)

Anonymous said...

Watchful Horseman

In reference to 2 latter blogs on Alan's, last subject - "Sticking With Sinking Ships"

In answer to Jason, - 'The Delaware North people were had a meeting at Big A today, I do not know what happened. 6:04 PM

U are in the know , this report coming few hours ago, Fri night, 27/09 -

'Workers for the company have made several visits to Aqueduct within the last week to conduct architectural surveys, according to Ron Sultemeier, a Delaware North vice president, and Aqueduct officials.
The workers updated architectural drawings and collected information for the company's zoning and permit applications, Sultemeier said…..
But it is my belief, that it was in actual fact, a familiarization course, for Delaware staff, on Aqueduct's location.

& thank-you also, to another well read blogger - Anonymous, 9.33am, for an interesting 'legal', explanation on -
'No word in the MOU about table games'. - 'But perhaps language in the "Conditions Precedent" section to further explain current delays…-.....'

Anonymous said...

I thought $370 million was included in the 08-09 fiscal budget as well, therefore the March 31st deadline? If the horse lobby is as strong as one writer mentions, it certainly isn't showing up outside the capitol. I think we should be hearing more pleas from powerful folks like Barry Ostrager from the NYBreeders Violette and Contessa from the NYTHA, and Hayward & Duncker from the NYRA. The passion seems to have disappeared from the fight, other than when Steve Zorn weighs in with his views which appear to be well advised.

Anonymous said...

Watchful Horseman

Agree, Steve Zorn is most active, well versed Horseman of all - no argument.

Read his old blogs on Magna, warning us well in advance, years ago, in mi-nute detail, before Frank's stack of cards, was allowed to cascade.

Anonymous said...

Just confirmed that the $370 million payment by DelNorth is calculated in this current fiscal budget. Actually, this 08-09 budget reflects $250 million coming in, so DelNorths $370 million was surely why it won the bid topping the anticipated 2008-09"budget amount by $120 million.

From the Bloomberg article October 17, 2008:

Paterson said last week he selected Delaware North to run the facility near John F. Kennedy International Airport in the new York City borough of Queens because it "presents the strongest finacial proposal," among three competing bidders."

"The $370 million payment by Delaware North is $120 million more than the state projected in THIS YEAR'S budget and may help narrow the deficit."

The egg on the Governor's face can be wiped away if he chooses another vendor and team in a better position to deliver than Delaware North, or if he holds the line and makes them perform under the terms of the agreement made when announcing the award. This can be a big judgment day as to Paterson's leadership skills and his ability to recognize miscalculations that were probably not made clear to him as O'Byrne may have been whispering too softly, perhaps for the governor's own good.

Anonymous said...

So because Delaware North deliberately overbid by nearly 50% more than was budgeted, that gives them the right to hold the state hostage? Got news for you, Guv: the "strongest financial proposal among the three competing bidders" was a bluff, pure and simple.
C'mon, the right thing. Man up and throw DelNorth out. You lost that poker hand, but now's your chance to make things right for the state and your own future in politics.

Anonymous said...

Watchful Horseman

Obtaining another Aqueduct franchise winner - either way, just Paterson making the decision, is impossible -
isn't it a room of 3.

After having thought about pro/cons, if a quick solution is, to choose one of the other 2 bidders, good.

As they have I admit, spent millions on their bids, been through hell with politiccal games & time factor for new bids, is another 2 yrs minimumm.

If new bids are called, previous 2 bidders will sue, even now in theory, they have grounds for litigation, abet after the 31st March- DN's d-day, unless DN have done a backroom deal with that room of 3, which I doubt after their unfortunate paper tiger, promises.

Yes, other 2, both promised actively, Horsemen, Breeders & Queens Community, a hell of a lot more & openly than DN was forced to publicly do.

We're all also, damm tired & broke - just avoid it going back to court.

Anonymous said...

Granted a room of (3), but Paterson is seemingly in the lead on this one? The way I see it, not one reason for selecting DelNorth can be renegotiated at this point or S.L. Green or Capital Play sues on grounds of fairness in the bidding or procurement or whatever the process used really was.

maybe the Watchful Horseman is correct and the two underbidders are brought back in to see where they stand, and if possible, a new team emerges that can get this thing done. Both bidding entities have spent many millions, not only to lose the contract, but now they have to watch the winner fail to abide but its award while holding the state of NY hostage.

Would shelly Silver support throwing out the DelNorth bid with all the lobbying done on it behalf by his close pal Patirica Lynch? It may make sense to do so, but can silver see through his dark glasses on this one? If Skelos supports bringing in the underbidders, Paterson may go the other way just to spite him. That's why I think the Governor must be in charge and and let the political "chits" fall where they may.

Anonymous said...

Waitng 8 years for VLT's is nothing. The 2nd Avenue subway line has been budgeted for 75 years or so.

The government can't do sh*t. The sooner they are out of all of our lives, the better.

steve in nc said...

Talk about throwing the baby out with the bathwater. Ever thought about trying to make government better?? Millions of people tried to do that this last fall. Sorry you didn't like the outcome. Government sure was in tip top shape when the people who campaigned on getting government off our backs were in charge.