12/07/2007 12:00AM

Bruno floats a very bad plan

EmailNEW YORK - Of all the nutty ideas that have come up in connection with the future of the New York racing franchise - shutting down Aqueduct, designating a different operator for each of the state's tracks, turning the whole show over to Australian bookmakers - there's a serious new contender for the nuttiest of them all. Joe Bruno, the state senate majority leader who is holding up the process, now wants the tracks to turn over the sale of their simulcast signals to a new state agency staffed with political appointees.

The only question surrounding this proposal is whether it is stupid, sinister, or both.

Among the many aspects of the New York Racing Association's operations that have been questioned, both fairly and unfairly, its signal price has never been raised because there is no issue surrounding it. NYRA's rates are among the highest in the country, commensurate with the quality and popularity of its racing, and are entirely consistent with industry norms. As in every other state, experienced track officials negotiate simulcast contracts within a very narrow band of market pricing, and those contracts are routinely reviewed and approved by state regulators, in New York's case the State Racing and Wagering Board.

There is no lack of government involvement or oversight, and little need for any. The tracks' interests are entirely aligned with those of the state, as both benefit from charging the highest rates the market will bear.

This is not to say that signal prices are not a major industrywide issue. It is clear with hindsight that all tracks underpriced their signals at the dawn of simulcasting nearly 30 years ago. The racing industry would be far better off if there had been a 50-50 split between interstate senders and receivers instead of the current arrangements where the sender typically gets 3 percent of handle while the receiver keeps 15 percent or more.

That historical mistake can not be undone easily, however. There are antitrust issues involved if tracks act together to raise prices, and anyone who tries to go it alone will be shut out of the market, as California learned when it lost a long game of chicken over signal prices with Las Vegas several years ago.

In any case, the notion that some new commission composed of New York politicians' friends and donors could secure better rates for the signal is preposterous - so much so that one has to question Bruno's motives in raising this non-issue a month before the expiration of the NYRA franchise.

Bruno has been lobbied throughout the franchise-renewal process by various racing companies, including Churchill Downs and Magna Entertainment, which were founding partners in Empire Racing, at one time a leading prospect to be awarded the franchise. Bruno had close ties to other members of Empire's original board, many of whom are longtime allies based in the district he represents, and one of whose members was forced to resign from Empire amid a federal investigation of his business dealings with Bruno. Even as Empire was disintegrating in recent months, with Churchill and Magna finally bailing out, Bruno was curiously calling for the involvement of out-of-state racing entities in the operation of New York's tracks.

The relevant backdrop to all this is NYRA's cable-TV and home-wagering deal with the Television Games Network, which expires along with the franchise at the end of this month. TVG's future is highly uncertain if it does not continue to carry NYRA racing, because Tracknet, an alliance between Churchill and Magna, has pulled its tracks' signals from TVG as contracts have expired. The clear Tracknet long-term strategy is to eliminate third-party providers such as TVG and YouBet from the account-wagering equation.

The uncertainty surrounding TVG only intensified when its parent company, Gemstar, was sold Friday for $2.8 billion to Macrovision, an anti-piracy software company whose officials said they have yet to evaluate whether to keep or sell TVG. If it's the latter, Tracknet would be the logical buyer, and the price would be much lower if the TVG portfolio of contracts does not include NYRA racing.

Maybe it makes sense for NYRA to join up with Tracknet, which might move the game closer to having a single account-wagering system with wide carriage over multiple platforms. Or maybe it makes more sense for NYRA to remain independent, or to re-up with TVG if it continues to exist.

That is a decision that needs to be made by NYRA or whoever is operating the tracks, however, not by a commission of amateurs serving at the direction of politicians who have aligned themselves with companies that stand to gain by the choice.