10/11/2006 12:00AM

NYRA board discusses bankruptcy filing


The board of directors of the New York Racing Association met on Wednesday to discuss the possibility of filing bankruptcy by the end of the year, but it was unclear whether any specific course of action was taken.

An official at NYRA said that no one would comment on the board meeting.

Charles Hayward, the chief executive of NYRA, said on Tuesday that he would give a presentation to the board that would outline the company’s financial performance. He said that the company could not remain solvent unless it received the full loan package negotiated with the state at the end of last year. But Hayward said that he would not recommend a course of action at the board meeting.

"That would be up to the board to decide, as that's not a decision for management," Hayward said Tuesday. "But if we are not able to draw down that money that was legislated and approved for us, we can’t remain solvent through the winter."

NYRA officials said in August that the association might file for bankruptcy if the state's lottery corporation does not release $19 million as part of a $30 million loan package. NYRA officials have been negotiating with lottery officials and Gov. George Pataki, and NYRA officials have said that the sides were close to a deal to release the money as recently as Friday.

The negotiations over the loan are part of a complex political backdrop to the future of NYRA, whose franchise to operate Aqueduct, Belmont, Saratoga, and a casino at Aqueduct expires at the end of 2007. A state committee is reviewing four bids to take over the franchise, including one submitted by NYRA, and is scheduled to release recommendations to Pataki - who leaves office later this year - and the legislature by the end of October.

The lottery corporation has said that it cannot release the $19 million until it approves a contract between NYRA and MGM Grand, the casino company, to operate the casino at Aqueduct. NYRA's plans to construct the casino have faced countless delays since the legislature approved slot-machine gambling at eight racetracks in 2001.

NYRA's board met on the same day that Yonkers Raceway opened the doors to a casino housing 1,870 slot machines. That casino, which eventually will have 5,000 slot machines when construction is complete, is expected to be one of the highest-grossing slot-machine locations on the East Coast because of its proximity to the New York metropolitan area. Only the casino at Aqueduct - which is in Ozone Park in Queens and is connected to New York by a subway line - is expected to generate more revenue in the state. Six of the eight racetracks approved for slots in 2001 are now operating casinos and the seventh is expected to open in two weeks, leaving only Aqueduct without slots.