03/26/2007 11:00PM

Catskill quits New York bid

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Catskill Off-Track Betting Corporation, the upstate New York county-owned company, will no longer seek the franchise held by the New York Racing Association, the head of the corporation said in a statement.

Donald Groth, the longtime president of Catskill OTB, said the company had decided to drop out because of a government panel's requirement for a $100,000 retainer for expenses related to a background check designed to assess any future franchise-holder's integrity. Groth said he thinks Catskill's reports to state regulators are adequate to determine the company's integrity, and he criticized the use of public money for the assessment.

"Catskill OTB could not agree to such a large payment of public monies which would still further certify Catskill's well-studied integrity," Groth wrote in a letter sent to the panel.

In 2002, Chris Harn, an employee of the bet-processing company Autotote, used Catskill's telephone-betting operation to place a pick six bet on the Breeders' Cup that he later manipulated by gaining access to Catskill's computer servers. Harn and two co-conspirators were later convicted of the crime, and a report by investigators cited deficiencies at Catskill for playing a role in allowing the fraud to take place.

Public hearings administered by the panel, appointed by Gov. Eliot Spitzer, to evaluate presentations on taking over the franchise are scheduled for April 10 and April 11. Last week, another group that had indicated it would participate also dropped out. The group, Thoroughbred Racing NY, was headed by the casino operator Steve Wynn and several real estate developers. The four groups that are expected to still make presentation are Capital Play, Empire Racing Associates, Excelsior Racing Associates, and the New York Racing Association.