12/13/2005 12:00AM

Racing group details plan to overhaul New York laws

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New York legislators and regulators should overhaul the state's racing laws in 2006 and pave the way for a public-private partnership to replace the New York Racing Association, according to a final report by a racing advocacy group that was released on Tuesday.

, issued by Friends of New York Racing, called on the state legislature to legalize slot machines at Belmont Park, approve online horse race betting and rebates, and simplify myriad tax rates and fees that apply to simulcast signals through an omnibus racing bill in 2006.

The report also urged the legislature to speed up the process by which it will begin to accept bids on NYRA's franchise to operate Aqueduct, Belmont Park, and Saratoga Racecourse, along with a casino at Aqueduct. NYRA's franchise expires at the end of 2007.

Friends of New York Racing, which is headed by Tim Smith, the former chief executive of the National Thoroughbred Racing Association, is funded by a number of parimutuel companies and associations, some of which are expected to make bids on NYRA's franchise. The group was formed in late 2004 in order to develop recommendations for the New York racing industry in advance of the franchise renewal, which is expected to be a highly contentious and political process.

Friends of New York Racing has already drafted legislation that supports its recommendations. [Full text of the proposed legislation is available at .] Smith said Tuesday that he expects a draft of the legislation to be introduced in March, with a goal of getting passage by June. A sponsor for the bill has yet to be determined, Smith said.

The release of the report is one step in a continuing process that will ultimately determine the fate of the franchise currently held by NYRA. A committee created last year by the state legislature to issue request for proposals for the franchise is expected to begin holding public hearings in January, but the committee is expected to take at least six months before issuing the formal request.

Smith said that Friends of New York Racing will concentrate its efforts next year on getting as many "pro-racing" provisions inserted into the request for proposals as possible. The provisions could include guaranteed live racing days, commitments to fund capital improvements at racetracks, and dedicated revenues from any slot machine operations in order to benefit purses.

"The more pro-racing regulations that can be embedded in the RFP, the more attractive it's going to be for a pro-racing bidder, and the less attractive it is going to be for a pure gaming or real-estate play," Smith said.

The final report was the second produced by FNYR in six months. An earlier report made many of the same recommendations, including a call for the legislature to create a regulatory environment that would give New York's six offtrack betting companies an incentive to merge with the new business operator that will run racing at NYRA's three tracks.

The six OTB companies are currently owned by collections of local municipalities, and many have operated at cross purposes to NYRA. Most recently, NYRA has clashed with some OTB operators over its plan to award rebates to big bettors, a proposal that has not been approved by the state racing and wagering board.

NYRA is currently seeking to raise money in order to avert bankruptcy, according to its officials. The officials have said that NYRA will run out of cash by the end of this year unless the state approves plans to sell land near its Aqueduct racetrack and other cash-generating transactions.

The final report recommended that the state work closely with NYRA to avoid any bankruptcy filing, but also said that the state should "take all feasible steps to prevent the interruption of racing at the NYRA tracks" if NYRA becomes insolvent. The steps included an advance of cash to an oversight board charged with monitoring NYRA's operations "for the purpose of funding operations" at the NYRA tracks, the report said.

Charles Hayward, NYRA's chief executive, has said that NYRA does not plan to cease racing operations under a bankruptcy filing. Late last week, Hayward said that the state had given preliminary approval for NYRA to sell a parcel of land near Aqueduct to the Port Authority of New York and New Jersey for $5 million.

The final report pointed out that NYRA has an "unfunded" liability of $100 million in its pension and retirement accounts. When asked whether Friends of New York Racing has determined who would be responsible for those liabilities should NYRA lose its franchise, Smith said, "We don't have an answer for that. I don't know that a new NYRA or a new bidder would have the resources to take on the obligations that do exist."