10/05/2005 11:00PM

Bruno wants to speed up the NYRA bid process


Joseph Bruno, the New York Senate majority leader, is pressing to speed up the work of a committee charged with finding bidders for a new franchise to conduct racing at the New York's three major racetracks and to operate a slot-machine casino at Aqueduct.

Bruno said in a statement Thursday that he had "very serious concerns" about the ability of the New York Racing Association, which operates the three tracks, to address its financial problems. Earlier in the week, NYRA's chief executive, Charles Hayward, told a state oversight panel that NYRA could run out of cash by the end of this year if state regulators do not allow the association to sell approximately 80 parcels of land adjacent to Aqueduct.

"NYRA's financial problems have raised very serious concerns about the organization, and we need to move forward as soon as possible with the selection process to find a new franchisee to avoid jeopardizing the future of racing in New York," Bruno said.

Later, NYRA officials pointed out that Bruno's statement said NYRA's current management "is doing the best with the problems they inherited." Bill Nader, NYRA's senior vice president, said that NYRA's problems are more a function of the state's regulatory structure rather than bad management.

"It is impossible to effectively and profitably operate a business that cannot borrow money due to its limited corporate duration and cannot statutorily retain profits while paying over $100,000 in taxes to the state every racing day," Nader said.

Bruno, a Republican, was once a NYRA ally but has distanced himself from the association as its troubles have mounted. Bruno's son, Kenneth, works for a lobbying firm that has been retained by Magna Entertainment Corp., the country's largest racetrack operator and one of the companies expected to bid for the New York franchise.

NYRA only recently emerged from a court-ordered monitorship as part of a deal to escape charges on tax fraud related to cash policies in its mutuel department. Since then, in addition to Hayward's recent comments about NYRA's financial condition, the association's clerk of scales and assistant clerk of scales have been indicted on charges relating to jockey weights. Last week, a teller was fired for placing $30,000 in unpaid bets out of his cash drawer.

NYRA's franchise to operate Aqueduct, Belmont Park, and Saratoga Race Course does not expire until the end of 2007. Earlier this year, the New York legislature passed a bill establishing a nine-member panel that will set the parameters for the franchise renewal and make recommendations to the legislature about which bid to accept. Bruno said in his statement that the franchise panel should issue a request for proposals for bidders within 60 days, and award the franchise within the next six months.

The franchise panel is expected to recommend that New York's racing law be substantially rewritten to attract multiple bidders. One of the changes under consideration is the legalization of slot machines at Belmont Park as well as Aqueduct. The casino at Aqueduct is expected to generate $1 billion in revenues annually, with approximately 30 percent retained by the franchiseholder, New York horsemen, and the slots vendor, according to the current slot-machine law.

Six of the nine panel members have already been appointed, three by Bruno and three by Gov. George Pataki, also a Republican. The other three members will be appointed by Assembly majority leader Sheldon Silver, a Democrat.

Sisa Moio, a spokeswoman for Silver, said Thursday that Silver is "currently narrowing his choices" for the franchise panel.

Bruno said in the statement that the New York State Racing and Wagering Board has the authority to revoke NYRA's franchise. If that revocation occurred, Bruno said, then NYRA's franchise would be taken over by a five-member oversight board. The oversight board would also control the slot machines at Aqueduct until a replacement company could be found.

NYRA is at odds with the oversight panel and the racing and wagering board over the association's planned land sale at Aqueduct. Earlier this week, the chairwoman of the oversight panel, Carole Stone, said that she believed NYRA needed the approval of the racing and wagering board and the state legislature to proceed.

Wednesday, Dan Toomey, a spokesman for the board, said: "NYRA is required by law to seek the board's approval in these matters, and should it attempt to move forward without obtaining the necessary approvals, the board is prepared to explore all available options, including litigation and potential revocation of the franchise."