02/15/2008 1:00AM

Peace in New York is only temporary

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NEW YORK - So now that this whole pesky New York franchise-renewal mess seems to have been settled, when do the $150,000 maiden races at lavish new facilities begin?

Someday, possibly, but don't hold your breath.

The passage of bills in the state senate and assembly Thursday certified what had emerged as the only possible resolution of the issue after five bloody and expensive years of uncertainty and lost opportunities. The New York Racing Association will sign over its ownership claims to Aqueduct, Belmont, and Saratoga in exchange for a 25-year franchise extension and a two-part state bailout that will allow it to emerge from bankruptcy and operate pretty much as it has been until slot-machine revenues start to flow its way next year.

All of this could and should have happened six years ago, when New York approved slots at the tracks, but that provision turned a racing franchise no one but NYRA had previously wanted into a glittering prize. Politicians, real-estate investors, and gaming operators did their best to steer it into private hands that were willing to spend lavishly for a monopoly on slots in the nation's biggest city, but their patent greed and insincerity, and the inevitability of a land claim-for-franchise swap, ultimately made the incumbent the only feasible awardee.

The last five months, following the striking of the current deal between NYRA and Gov. Eliot Spitzer, have been little more than the ritualistic stagecraft of New York's dysfunctional state government. It took the full array of agitprop tactics to get the franchise deal over the finish line - threats of a shutdown, employees bussed to the steps of the state capitol, high-profile resignations, an assemblyman vowing to use bolt cutters to liberate Aqueduct.

Attempts by state Republicans to reopen the bidding process, to put political appointees in charge of the NYRA board and to seize control of its most crucial business functions failed completely. NYRA will appoint 14 of its 25 board members, effectively trumping the 11 governmental appointees, and an attempt to require a supermajority (two-thirds) threshold for board approvals was beaten back. The handful of concessionary scraps to the initial agreement - a 30-year rather than 25-year extension and a cumbersome but toothless franchise oversight board - were enough to let all sides claim victory for an agreement a competent mediator could have negotiated years ago.

If you think the mischief and grandstanding are over, though, you're forgetting the mantra of racing in the 21st century: It's all about the slots. It's a tremendous relief that the racing side of things will remain in the hands of a non-profit entity led by people who genuinely like and care about racing, but the Aqueduct casino franchise has yet to be awarded and that's where the real money is.

That's also where the money is coming from to bail out NYRA and to fund the improvements the facilities and the daily operations so badly need. It's great that racing's getting 7.5 percent of the slots revenues, but 7.5 percent of what? Projections of $500 a day in revenue-per-machine seem rosy given much lower recent results in other new markets. Exactly how lucrative will rooms full of slots at a relatively uninviting Aqueduct be in the face of ongoing competition from megaresorts in Atlantic City and southern Connecticut and anticipated new casinos in the Catskills?

The other key unresolved issue involves the state's six offtrack betting corporations, who won a seat on the new NYRA board but whose future was not addressed in the legislation beyond charging the franchise oversight board to "facilitate discussions." Until they are radically restructured, through a merger among themselves or with NYRA, they will continue to be a redundant jobs program for municipal workers and patronage appointees instead of an efficient bet-processing arm of the racing industry. Sometime between now and June, long before the first nickel from a slot machine heads racing's way, the OTBs are going to be pushing hard for new revenue splits that divert money from racing and its customers in order to improve their own bottom lines. Don't bet against them.

The only thing regrettable about NYRA's retaining the franchise instead of its being privatized in a more creative fashion is that an opportunity was lost to eliminate constant governmental interference with racing, or at least reducing its role to one commensurate with other industries. The overregulation of racing is an anachronistic holdover from the days when it was the only gambling game in town. The most basic business decisions remain hostage to state approval, which will now grow even more onerous with a franchise oversight board in addition to a recalcitrant state Racing and Wagering Board, and with the creation of three new community boards who must be consulted about changes and capital improvements at each of the tracks.

The next time NYRA's franchise is up - circle New Year's Eve, 2033 on your calendar - it won't have the club of a land claim to ensure its continued existence. One can only hope that by then, the previous quarter-century of New York racing will have been so golden that a franchise renewal will take more like five minutes than five years.