Race to run state tracks trots along

There are a lot of players in the race to run New York’s three thoroughbred horseracing tracks, Saratoga, Belmont and Aqueduct. The problem is that nobody is sure what the purse is, or where to find the finish line.
The New York Racing Association (NYRA) has held the franchise to operate the tracks since 1955. Their franchise expires on December 31 of this year, and as of yet, the state appears no closer to picking a successor than they were four years ago.
Right now, there are four bidders, Empire Racing Associates, Excelsior Racing Associates, Capital Play, and NYRA, which is currently in bankruptcy court seeking protection from their creditors including the state, city and their pension fund.
Governor Eliot Spitzer has suggested that the franchise to operate the tracks may include the right to operate Video Lottery Terminals (VLT), the modern equivalent of slot machines, at the tracks, or that the tracks and VLT gambling would be operated separately.
Spitzer has also suggested closing Aqueduct entirely, saying that the Ozone Park site was “a remarkably valuable piece of land from a public perspective.”
He has suggested that the site could bring in $1 billion from developers, that it could be an entertainment complex with gambling but no track, a hotel/convention center complex, housing, a park or “some other things.”
The problem is that NYRA says it owns the property under the tracks, and is asking the bankruptcy court to confirm it. The state says they do not, but Spitzer has offered NYRA a 20-year exclusive franchise to operate the tracks - if they give up claim to the property.
NYRA blames the state for its troubles, saying that competition from the state’s Off-Track Betting Corporation (OTB) and actions by the State Lottery Division have hurt all three tracks, particularly Aqueduct.
The track in Queens used to draw 25,000 people a day before OTB betting parlors became fixtures around the state. Last year, attendance at Aqueduct averaged just 2,952 daily for the 129 days the track was open for racing.
Worse yet, according to NYRA, Aqueduct is the only track which has been approved for VLT operation but doesn’t have them.
The approval was passed in Albany in 2001 and NYRA entered into an agreement with casino operator MGM Mirage to operate a 4,500 VLT operation at Aqueduct, which was supposed to generate $400 million a year for the state.
In the summer of 2003, the grandstand was gutted as the first step of construction. However, legal problems forced NYRA under the guidance of a federal monitor and it had to reorganize its operations and renegotiate with MGM.
In the summer of 2005, NYRA sent the revised plan to the Lottery Division for approval, which never came. After four years of negotiations, MGM finally abandoned the Aqueduct project last May. NYRA filed for bankruptcy that September.
That isn’t the only change to the field of bidders.
On Monday, July 16, casino giant Mohegan Sun announced that it had teamed up with Capital Play, the Australian consortium with offices in New York. Capital Play had once been disqualified as a bidder, but got back in the running after Spitzer took office.
Empire Racing Associates, considered a favorite of State Senate Leader Joe Bruno and headed by a former head of the State Lottery, lost the support of the New York Thoroughbred Horsemen’s Association in June.
So where does this leave Aqueduct, and the Ozone Park neighborhood around it?
Assemblymember Audrey Pheffer, who represents the district which includes Aqueduct, isn’t sure.
“The Governor still hasn’t submitted a plan to the Legislature,” she said, adding, “he can’t do it on his own.” Pheffer pointed out that “the legislation says that VLTs have to be at operating tracks,” so any plan for a casino-type operation without racing would require a change in the law.
She also wondered what kind “major complex” can be built on property which is directly in line with one of the runways at JFK airport, a few thousand yards away.
“Other than that, people want to keep it a track” she said, observing, “They want to keep the jobs and the neighborhood business the track would generate. Besides, the flea market has become an integral part of the community.”
“The Governor is still looking to eliminate the track in my opinion” Pheffer surmised. “But we’ll fight to the death,” she said, “before allowing the track to be sold off to developers without community input.”