10/11/2007 11:00PM

Republicans lashing out at NYRA

EmailNEW YORK - When New York's Republican legislators scheduled yet another public hearing last week with the bidders for the New York racing franchise, they were attempting to reopen a process that had seemed to end last month when Gov. Eliot Spitzer recommended a 30-year extension for the New York Racing Association. The Republicans' general, Senate majority leader Joe Bruno, had said he thought the other bidders deserved further consideration to be involved with the operation of the tracks, citing the attractive involvement of powerful racing and real-estate companies in those groups.

By the time those bidders got to Albany last Wednesday, however, they looked less like genuine franchise candidates than like the remnants of defeated armies in retreat.

Empire Racing, Bruno's choice all along and once considered the favorite in the franchise sweepstakes, tried to put a happy face on the devastating announcements the same day that its key partners were abandoning the enterprise en masse. Empire's partners once included the official New York horsemen's group and a slew of industry heavyweights. Then the horsemen cut their ties to Empire last month, and on Wednesday, Magna Entertainment, Churchill Downs, and even honorary chairperson Marylou Whitney all jumped ship, saying that Empire had morphed into a group they could no longer support. Another key partner, Delaware North, confirmed Friday that they, too, have left Empire.

Excelsior Racing, the choice of a previous administration's committee on the strength of backers including the Steinbrenner family's New York Yankees organization and casino developer Richard Fields, lost the Steinbrenners' support and involvement over the summer. On Wednesday, it quietly conceded that Fields had now left the fold as well and is instead pursuing a casino license at Suffolk Downs, which he bought earlier this year.

The fourth bidder, the longshot Australian bookmaking group Capital Play, made its usual token appearance, continuing to take credit for advances in Australian racing it had little if anything to do with. The company has never been taken seriously as a franchise contender and appears to be hanging around in hopes of some future involvement in slot-machine operations at the track.

This sorry lineup had to be frustrating to Bruno's committeemen, who quickly switched their tactics. Unable to pretend that these abandoned ships were credible alternatives to a NYRA extension, the committee shifted to beating up on the incumbent, inside and then outside the hearing room. Their complaint was that NYRA is in bankruptcy, ignoring the fact that it is the state's own broken system that has made it impossible for any operator to be profitable in New York under current law - the one thing that every franchise bidder agreed upon.

Such whining was to be expected, given their inability to offer a plausible candidate to oppose Spitzer's choice, but what happened next was truly shocking. The day after the hearing, the committee chairman, state Sen. William Larkin, proposed to alter the revenue splits from the pending new racino at Aqueduct, in order to reduce the already modest share of slots revenue that would be given to NYRA and race purses. Under the proposed agreement between Spitzer and NYRA, the as-yet-undetermined casino operator would get 26 percent of revenues; NYRA would get 6.5 percent; purses would get 7 percent; and virtually all the rest would go to the state. Yet even that 13.5 percent to racing now seems too high to the Republicans.

"What's the point of giving a subsidy to a company that is taking $20 million from the taxpayers each year?" Steven Casscles, Larkin's counsel, said in an interview with Daily Racing Form's Matt Hegarty. "They'll just keep losing money."

In other words, let's punish NYRA for predictably losing money under a broken government system by giving it less money going forward.

What was really astounding about the proposal was what the Republicans want to do with the money they would divert from the nonprofit NYRA and its race purses. They didn't claim the state needed the money for school lunches or pothole repairs, and they didn't propose giving it to animal-welfare or backstretch-employee organizations. Instead, they want to increase the Aqueduct casino-operator's share - as if 26 percent of an estimated $2 billion in annual revenue, from what would be a monopoly casino in the nation's biggest city, is not enough.

This touching display of concern for the profit margins of casino investors can only make one wonder: Who is being quietly lined up behind the scenes to get the Aqueduct contract, and have the politicians been promised something in exchange for cutting them an even larger slice of the pie?