08/06/2010 3:41PM

Light at the end of New York tunnel


SARATOGA SPRINGS, N.Y. – There has been no dancing in the streets of Saratoga, and the champagne has yet to be uncorked, but maybe – just maybe – the nine-year nightmare of New York racing ended this week with the selection of Genting New York to operate a racino at Aqueduct racetrack as soon as next spring.

Nobody quite believes it yet. The announcement came on Tuesday afternoon, a few hours before the second night of the Fasig-Tipton yearling auctions here. If the assembled buyers were confident that the New York Racing Association and its purses will be getting an extra $75 million to $100 million a year by the time those yearlings are 3-year-olds, maybe the gross and average wouldn’t have been down 31 and 13 percent respectively from last year’s session.

A slot-machine parlor in beautiful downtown Ozone Park alone is not going to fix the issues that have crippled the bloodstock market – national economic conditions, the oversupply of breeding stock in a contracting market, and serious concerns about the future of racing in other venues, especially California. Still, if the Aqueduct racino – approved by voters nearly a decade ago – can make it one final yard over the goal line, racing in New York could rebound so strongly that Tuesday night’s purchases might look like bargains a year or few down the road.

Genting, a Malaysia-based international gaming giant, delivered a knockout bid that far exceeded what every other applicant in three previous rounds of bidding had proposed, including an upfront $380 million payment to the depleted New York state treasury. Genting will also cover the $25 million the state had to loan NYRA last month, and ongoing payments to NYRA of $2 million a month until the slots start spinning. Genting also shocked everyone who had an 18-month launch timetable in mind by saying it could have 1,500 of the anticipated 4,575 one-armed bandits going just six months after the official sign goes up on its bid.

It won’t be as quick an official sign as anyone would like – at least anyone except the politicians who already have cost the state an estimated $3 billion through nearly a decade of bogus investigations and failed attempts to steer the racino business to their buddies. There are four approval hurdles remaining – from the leaders of the state senate, state assembly, attorney general’s office, and comptroller’s office – and that means four last chances for obstructionist politics.

Matt Hegarty reported Friday in Daily Racing Form that the state senate’s legal counsel has now asked Genting to schedule “several presentations over the next several weeks so that staffers can question the company.” So much for a February opening. The senate can’t schedule several presentations without the assembly’s doing the same. The attorney general’s office, one of the few that seems to function responsibly in New York, shouldn’t be a problem, but Comptroller Thomas DiNapoli is an ambitious attention-seeker who has already issued several misinformed audits critical of NYRA.

There’s also one final appeal hanging out there from a rejected bidder from the third of the four rounds – the politician-friendly Aqueduct Entertainment Group, which briefly had the award before it turned out that it had been improperly privy to competitors’ bids before making its own. Even the New York state legislature couldn’t stomach that one and ordered the most recent do-over.

If and when these final hurdles are cleared, there are plenty of questions about how the racino will work. There hasn’t been one of these at a horse racing facility as important as Aqueduct before, and NYRA and proponents of the sport must be vigilant that this one turns out differently from most. With the significant exception of Woodbine in Toronto, where the slots have been woven into the racing experience and the racing facilities have been sharply upgraded, most racinos end up crowding out the racing product, and you can barely find the horses hidden somewhere out back.

The racino legislation dictates that NYRA will receive 7 percent of racino revenue for operations and capital expenditures, with another 6.5 percent earmarked for purses and breeders’ awards. Depending on whether you think the daily win-per-machine rate will be more like $375 or $500, that will mean a combined $75 million to $100 million a year for New York racing, more than enough for it to offer significantly higher purses and rebuild its facilities after a decade of shoestring maintenance.

And maybe, just maybe, after Breeders’ Cups at Santa Anita in 2008 and 2009, and at Churchill Downs in 2010 and 2011, it will even be time to let little old New York have one – or two – again.