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The New York Legislature during the final day of its session on Friday passed a bill from Governor George Pataki that would expedite the bidding process for the New York Racing Association franchise to operate Aqueduct, Belmont Park, and Saratoga Race Course.
The measure also establishes a NYRA Oversight Committee, which could revoke NYRA’s franchise and/or operate the franchise if a new one is not awarded. NYRA, which is approaching the end of an 18-month deferred prosecution agreement following federal indictments on charges that included conspiracy to commit tax fraud, is seeking to extend its franchise, which expires on December 31, 2007, but only if its not-for-profit status is changed.
"Our goal is to make a case that a reconstituted NYRA would be a good thing," NYRA President Charlie Hayward said. "If the state gave us a choice that NYRA could have the franchise extended, but we’d have to keep the same business model, we would choose not to continue. There would be no sense in continuing because right now NYRA does not have the right to maintain earnings for capital improvements. What we have been talking about is to find an alternative structure involving privatization. If not, then NYRA will participate in some form in the [requests for proposals to operate the franchise]."
The NYRA Oversight Committee replaces the Capital Investment Fund, which had been created in 1983 to facilitate capital improvements at the three tracks. NYRA’s debt of some $70-million to the fund will be transferred to the new committee.
Pataki will appoint three of the NYRA Oversight Committee’s five members while Senate Majority Leader Joe Bruno (R-Brunswick) and Assembly Speaker Sheldon Silver (D-New York) will appoint one each.
Independent of the NYRA Oversight Committee, Pataki will create a nine-member ad-hoc committee to solicit requests for proposals for a ten-year franchise to conduct racing at the three tracks beginning on January 1, 2008. NYRA has operated the tracks since 1955 and contends that it owns the tracks as well as the properties on which they are situated, a contention disputed by Pataki and many in the Legislature.
State lawmakers also transferred NYRA’s contract with MGM Mirage to build and operate a video lottery terminal at Aqueduct to the Division of the Lottery, which oversees VLTs at the state’s racetracks. If the Lottery approves the contract, it would allow the MGM Mirage to proceed with the installation of 4,500 VLTs at Aqueduct despite the fact that NYRA had not used competitive bidding for that contract as required by the state racing law.—Bill Heller
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