Thursday, June 22, 2006

The Future of New York Racing

I finally had a chance to read through the RFP for the New York State Racing Franchise. In general, I think the media has done a good job of reporting on the text of the RFP. However, there are a few items that are very unusual and troubling to me.

1) A response to the RFP depends on changes to New York State law. The RFP seeks proposals on the assumption that the State gaming law will be modified to conform with the Ad Hoc Committee's proposed changes. These changes include permitting entities other than non-profit racing associations from bidding on the contract and a repeal of the law that requires the franchise holder to remit all of its retained earnings to a State fund. The opponents of reform are fighting against these changes. The legislature took a baby step of progress today by passing a bill to permit limited internet betting.

2) The proposals can be filed with an assumption that a VLT casino can be established at Belmont, or without this assumption. Well, that's a REALLY big difference there.

3) And, my big issue. The RFP assumes that all of the Belmont, Aqueduct and Saratoga real estate belongs to New York State and not the current franchisee, New York Racing Association. Both sides have dug in their heels with decent legal arguments that the properties are theirs. This will undoubtedly go to court and could delay the process for years.

The one guarantee out of all of this uncertainty is that this is going to be an ugly, contentious process and it will not be completed in the timeframe stated in the RFP. There will be a new Democratic Governor in January and he will likely want to put his fingerprints on this Republican-awarded franchise. The future of New York racing is at stake and I have no confidence that the State government will do the right thing. I have been watching Maryland's racing program fall apart with Baloo and I dread seeing that here.

The bidders must identify themselves by the end of this month. I look forward to seeing and analyzing the players.

If you are having trouble sleeping, the link to the RFP is here.

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