Streamlined bids could expedite NYC-OTB sale

NEW YORK - The city of New York has requested and received new bids from two partnerships seeking to buy New York City Off-Track Betting Corporation, amid concerns that time is running short to pass legislation that would permit the sale this year.

The city's request for amended bids was intended to simplify the legislative process that must precede the sale, officials involved in the bidding said. The previous bids had included laundry lists of legislative requests, which would have complicated the effort to pass legislation enabling the sale.

State law permits only the city to accept bets, and that law still would have to be changed by the legislature before a sale could be approved.

The new bids were considerably lower than the previous offers, which were in excess of $250 million each, according to several officials involved in the bidding. "Without being able to tailor the legislation, OTB just isn't as valuable," one of the officials said.

The two partnerships, one headed by the New York Racing Association and the other headed by Magna Entertainment Corp., submitted detailed legislative requests with their previous bids two months ago. The city had urged the bidders to design an ideal legislative package to maximize the value of OTB to the buyers and, consequently, the revenue to the city in any resulting sale.

"We've seen the more extensive packages, and now we want to see a more bare-bones package," said Michael Hess, the chief legal counsel of the city, on Thursday.

NYRA, for example, wanted the state to extend its franchise to operate racing in New York as part of the sale. NYRA is licensed by the state to run racing at Aqueduct, Belmont, and Saratoga Race Course through 2007.

Among other requests, Magna wanted the legislature to approve expanded simulcasting at the OTB's and lift regulations over the design and operation of OTB facilities. "These weren't pie in the sky," said Robert Green, the president of Greenwood Racing, which is a principal in the Magna partnership. "These were things that New Yorkers deserve."

Magna reduced its bidding price, Green said, because "there has to be significant legislative change for the franchise to remain competitive with neighboring states and keep it viable going forward."

The new strategy is injecting additional urgency into an increasingly improbable task. With the budget approval process still unfinished, the state legislature is scheduled to adjourn on June 20, and legislators have said that they are reluctant to take on any complicated bills.

Last week, several government officials said that they did not believe a bill authorizing the sale of OTB could be passed this year. Citing the adjournment date, NYRA chairman Barry Schwartz also doubted last week that the deal could get done this year.

Schwartz said Thursday that the NYRA partnership, which includes Churchill Downs and Television Games Network, submitted a new bid to the city at the end of last week, but he declined to comment further.

New York Mayor Rudolph Guiliani vowed to sell OTB during his initial mayoral campaign in 1992. Guiliani's term expires this year, and city officials have said that Guiliani still intends to sell OTB.

Even so, an aide for Sen. William Larkin, the chairman of the Racing, Wagering, and Gaming Committee, said Thursday that legislators had yet to receive any information from the city on a possible bill or winning bidder. The city has said for two months that selecting a bidder was imminent. "We're running out of time up here, and until we have a bill, we can't do anything," said Steve Casscles, Larkin's counsel.