Updated on 09/15/2011 12:33PM

NYRA goes solo with OTB bid


The New York Racing Association dropped its partners, Churchill Downs and Television Games Network, in submitting a new bid last month for New York City Off-Track Betting Corporation, officials confirmed Friday.

NYRA submitted a bid on its own after city officials in early June asked the two finalists for the OTB purchase - partnerships headed by NYRA and Magna Entertainment - to submit new, pared-down proposals that did not include legislative wish lists, according to NYRA chairman Barry Schwartz.

"The city changed the parameters for the umpteenth time, and we saw it as an opportunity to go out on our own," Schwartz said.

Schwartz said that the earlier bid, which included NYRA and Churchill Downs, was still "live, if you want to call it that." But the city has placed the new bids at the center of its effort to sell OTB before New York City Mayor Rudolph Guiliani leaves office later this year.

Churchill owns seven racetracks and operates off-track betting outlets in Indiana, Kentucky, and Illinois. At the first round of bidding last year, the company submitted its own bid for OTB, but it partnered with NYRA early this year after its effort lost steam and it grew concerned about losing the corporation to its rival, Magna.

Churchill Downs officials declined to comment Friday, citing restrictions on public companies. Television Games Network, which is owned by telecommunications giant Gemstar-TV Guide Inc., had been NYRA's partner from the outset of the bidding process.

"On the scaled-down bid, our existing contract with NYRA for in-home wagering is an appropriate relationship for us," said Mark Wilson, president of TVG. "We will continue to be their in-home technology, programming, and wagering partner. Without some desired legislative changes, NYRA still is logically interested in the operation of the bricks-and-mortar OTBs and we wish them the best in their bid."

NYRA had taken on TVG as a partner because the association did not have enough money for the deal. In the first round of bidding, the city had required that the bidders pay at least $250 million for the corporation, which operates 75 off-track betting locations and took in $1 billion in wagers last year.

As a public agency that submits its profits to the state, NYRA cannot raise capital on its own.

Schwartz declined to provide details about NYRA's new bid, although he said that the proposal would be similar to one NYRA submitted two years ago to buy the corporation. In that deal, NYRA would have made an upfront cash payment and then paid for the acquisition in annual installments to the city.

The city is well behind schedule in naming a winning bidder, and closing a deal to sell OTB this year may be impossible. Although Guiliani vowed to sell OTB to a private company while campaigning in 1992, the New York City Council and one of the city's largest unions have raised objections to the sale, and legislative leaders have said that passing a bill that would allow the city to sell the corporation would be difficult this late in the legislative cycle.

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