05/16/2002 11:00PM

NYRA gets an extension


BALTIMORE - New York legislators passed a budget late Thursday night that contained a five-year franchise extension for the New York Racing Association - through 2012 - but did not include several major changes sought by NYRA to legislation that legalized slot machines at some tracks.

NYRA was seeking a larger percentage of the revenue from slot machines. But, aides said on Friday, legislators who had supported the changes decided to drop them, fearing that such modifications would invite further lawsuits against the bill. Anti-gambling groups have already filed suit challenging the legislation, calling it unconstitutional.

The franchise extension will allow NYRA to remain as the operator of Aqueduct, Belmont Park, and Saratoga Race Course until 2012 as long as slot machines are running at Aqueduct by April 1, 2003. NYRA's franchise was set to expire in 2007.

Bidding for the extension has been a political chess match in the past, and NYRA has frequently sought legislative extensions to avert open negotiations. Political supporters said that NYRA needed the extension to secure loans that would enable the association to pay for massive renovations at Aqueduct - the only NYRA track that will be allowed to have slot machines. The budget included changes that will allow NYRA to restructure its existing debt, also to ease the way to get renovation loans.

"The tracks had suggested that they would have a cash-flow problem," said Steve Casscles, an aide to Sen. William Larkin, the chairman of the Racing and Wagering Committee and a supporter of NYRA. "They didn't believe they could get money for Aqueduct unless they had some stability."

NYRA officials did not return phone calls on Friday.

NYRA was hoping that legislators would increase its share of the slot revenue from 12.5 percent of the net win to 17.5 percent. NYRA officials said they needed the revenue to pay for renovations to areas of the track that will house the slots and also to monitor the slots. The current bill gives 60 percent of the net win to the state budget, 15 percent to the lottery commission, and 25 percent to the racing industry, split equally between horsemen and tracks after the first year.

The budget, though, will allow NYRA to retain as much as 70 percent of the racing industry share for the first three years if horsemen agree, assembly aides said.

The budget pushed back the expiration date of the slots legislation, to Dec. 31, 2007, aides said. The original legislation made the enabling law expire after three years of operation.

The budget included an additional $17.5 million for the state lottery division to handle administrative expenses related to slots, which will be managed by the lottery. The New York State Racing and Wagering Board received $1.3 million.