HELP IS ON THE WAY-CUOMO CLEANS HOUSE

[high roller]

Gov's 'bettor' way

Plan to kill NYRA and privatize horse racing
By FREDRIC U. DICKER
Last Updated: 12:33 AM, September 24, 2012
Posted: 12:31 AM, September 24, 2012

Fredric U. Dicker

Gov. Cuomo, in a startling move, has decided to "privatize'' the running of the famed Aqueduct, Belmont and Saratoga thoroughbred tracks with a new management company that will replace the scandal-scarred New York Racing Association, The Post has learned.

Cuomo, who will sign legislation within days giving the state control of NYRA's board of directors, plans to seek public bids for a new operator to replace NYRA, a not-for-profit corporation, from for-profit companies with deep experience in the racing and/or entertainment industries, sources said.



G.N.Miller/New York Post

 Andrew M. Cuomo

State officials believe operators of such prestigious tracks as Churchill Downs, site of the Kentucky Derby, and Santa Anita Park, in Arcadia, Calif., as well as the managers of major entertainment destinations, will pay huge fees to run the three New York tracks.

A source with firsthand knowledge said it will take several months to draw up the specifics, and bids will likely be solicited by the middle of next year.

"Why not let Churchill Downs compete with Santa Anita, with Formula One, with Madison Square Garden for the best operation of the tracks?'' asked the source.

Aides to Cuomo including Howard Glaser, the director of state operations, had worked for months on a sweeping NYRA reorganization plan in preparation of the governor's signing of new legislation giving the state direct control of the 55-year-old racing association's operations.

But in mid-summer, as the Saratoga meet got under way, the Cuomo aides decided that NYRA's organizational structure and management team, which has had a series of scandals in recent years, wasn't up to the job and that a new approach — proven outside management — was needed.

"The NYRA model won't work. It's flawed, and it's unable to do the job. Privatizing makes the most sense,'' said the source.

The Post reported in July that current NYRA President/CEO Ellen McClain would be fired after the governor signed the legislation taking control of the racing association. A source said McClain's dismissal would likely occur early next month.

The legislation to be signed by Cuomo creates a new 17-member board of directors for NYRA, eight to be picked by Cuomo and four by the leaders of the Legislature. The current NYRA board will have only five appointees.

Meanwhile, as part of a build-up to the coming changes at NYRA, Cuomo will announce on Friday a new oversight and regulatory process for ensuring the health and safety of horses at the three tracks, it was learned.

The changes will include the creation of an oversight body, separate from the moneymaking side of the racing business, to address a growing number of horse deaths and injuries at the three tracks.

Experts link the problem to increasingly lucrative racing purses generated by the huge profits coming to NYRA from the year-old racino at Aqueduct.

"Nobody really had the best interests of the horses in mind,'' said the source.

The Post has also learned that the state Inspector General has concluded that "negligent oversight'' by NYRA's top management and its board of directors was responsible for the massive "takeout" scandal that cost bettors nearly $8.5 million over a 15-month period ending late last year.

Acting Inspector General Catherine Leahy Scott, nearing the end of a five month investigation, concluded that former NYRA CEO Charles Hayward and General Counsel Patrick Kehoe, along with "virtually everyone else in a position of responsibility,'' knew of a legal requirement to lower the amount the association took from bets being placed at the three tracks but failed to act, said a source with knowledge of the report.

Hayward and Kehoe were fired by NYRA in May after the state Racing and Wagering Board disclosed the takeout scandal. However, the Inspector General's report will say the state board didn't act quickly enough.

Cuomo followed up the report by ordering an investigation by the Inspector General, partly to determine if NYRA officials had engaged in criminal conduct or might be liable in a civil court action.

The IG report concluded that no criminal conduct occurred and that a successful Civil Court action was unlikely, the source said.

[Themig]

Any opinions on what would be the BEST and WORST case scenarios re the new guys on the block? Reasons?

[miff]

The plan to spin NY racing to the private sector was on the calender for 2015 as was the development of the area near Belmont Park.After Pisano Cuomo\'s convention speech, he\'s def running in 2016. His disdain for NY racing far exceeds what was thought and there must some perception of a gain in political capital by accelerating the process.The revenge of the Cuomo\'s against the racing blue bloods an added bonus. Concern for the thousands that may be financially hurt in the process and the loyal players/supporters of NY racing, not even considered.

A referendum,fully supported by Cuomo/Silver, to allow full blown casinos in NY State almost sure to pass in 2013.Further competition for NY racings handle.
Every business model shows NY racing a bad investment as a stand alone business.Only slot/casino subsidies make it attractive as a profitable ongoing enterprise with possible modest revenue growth expectations from racing.

Aside from Frank Stronach and CDI where there may be synergies/redundancies/ consolidations,who would dare want to invest in NY racing. Guess what, there are already groups lined up and ready to take a shot at owning/running NY racing if they can get a \"sweetheart\" deal.Obviously, most are heavily politically connected.The privatization of NY racing should make the failed attempt to sell NYC OTB look like small beer with every political leach looking for a piece of a monster pie.

A mature and ever shrinking customer base, gambling competition from impending NY casinos,racinos,on line poker,new legal sports betting along with a negative perception of racing.Sounds like a great buy!

With great popularity and massive political clout don\'t sell pisano Cuomo short in throwing NY racing under the bus. This is a very uncertain time for all who invest in NY racing or who make a living at it.Guessing there will be a massive outcry from the racing community unless certain guarantees are assured by the State,going forward.Would not trust a politician if he swore on a stack of bibles.

Hoping all with a platform/pulpit will at least speak out on this hijacking of NY racing by pisano Cuomo.

[magicnight]

Can\'t argue with any of that, Mike.

Looking back, I think NYRA was screwed the instant they traded the open question of who owned the three tracks for another 25-years of management. Once they answered that question, whatever leverage they had went out the window.

Sad.

[miff]

Magic,

NYRA was duped. The NYRA Board had their lawyers looking into suing the State for breach of the agreement when Cuomos hijacking became apparent.The NYRA Board was ready for a fight.After an Albany meeting with Cuomo\'s top honchos,the NYRA Board capitulated.Hear NYRA was kinda told that taking legal action against the State would lead the State to possibly look into breach of law/criminal charges against present and former NYRA Officers/Directors.

Govs team treacherous and powerful,a lethal combination.

Mike

[miff]

Report: State to Seek Bids to Operate NYRA
By Tom Precious Bloodhorse

Updated: Monday, September 24, 2012 11:32 AM

Just days before the state is to take over control of the New York Racing Association, New York Gov. Andrew Cuomo is sending signals he wants to put the operation of the racing entity out to bid to for-profit companies.

The move, if true, would amount to a direct attempt to end the role of NYRA, which has held exclusive operation of three Thoroughbred tracks since 1955, in any form of racing and scuttle the franchise extension agreement signed several years ago between a previous administration and NYRA. The administration\'s idea was floated Sept. 24 in the New York Post, which reported the state envisions making a large amount of money from for-profit corporations that will want to run Aqueduct Racetrack, Belmont Park, and Saratoga Race Course.

A bill approved in late spring is, sources have been saying, expected to be signed by Cuomo the week of Sept. 23. It gives Cuomo the authority to name eight new board members, including its chair, to a newly constituted NYRA board that, with four members selected by legislative leaders, puts NYRA under the control of the state for the next three years.

Cuomo has not wanted to sign the bill until he could find his eight choices for board seats; only a board chairperson had yet to be finalized as of the week of Sept. 16.

The Cuomo administration has been eyeing various land deals for NYRA property, including a full-blown casino next to Aqueduct and its video lottery terminal facility. Two weeks ago, the state put out to bid two separate parcels of land at Belmont, either for sale or lease; the proposal asks for a variety of possible uses for the more than 100 acres of land surrounding the track.

What Cuomo\'s long-term intentions are for the racing industry remain uncertain. He has said NYRA, based on various scandals over the years, including the recent one surrounding higher-than-permitted pari-mutuel takeout levels on exotic bets, is unfit to run racing.

Sources said the Cuomo administration has also taken over the rollout of a report by several industry representatives, including Hall of Fame jockey Jerry Bailey, looking into a high number of equine deaths last winter at Aqueduct. The report, finished for weeks, was set to be released the week of Sept. 16, but sources said it is now scheduled to be unveiled Sept. 28.

The report will be stinging, sources have said for weeks.

Recommendations will include proposed regulatory changes to the system of how the track-based veterinarians conduct their business to end what some industry insiders have said is a too cozy relationship between trainers and vets. The New York Times Sept. 22 published a lengthy article investigating what it characterized as a troubled system whereby trainers often tell vets what kinds of drugs a horse needs. The Post said a new oversight panel will be created to track equine health issues.

It is uncertain what legal avenue the administration will seek to end the agreement made in 2007 by former Gov. Eliot Spitzer to extend NYRA\'s franchise for 25 years. That deal, which included another round of state bailout money, also featured NYRA relinquishing its longstanding ownership claims to the land at the three racetracks in return for the exclusive extension to run racing.

The administration, the Post said, floated entities such as Churchill Downs Inc. and Madison Square Garden as potential bidders that might be interested in running NYRA. While the report said the administration was seeking to \"privatize\'\' the tracks, it did not suggest the state would be seeking to sell the three facilities, which would be a true privatization effort

[TGJB]

Watch Betfair.

The guys I was dealing with are no longer there, but years ago I put them together with Spitzer\'s people (not that I had a big in, but one of his guys was close with a friend of mine and used to read this board). If the plan here is to license someone to operate the franchise, they will be trying to get in, and they are one of the few players with a ton of cash.

[magicnight]

Dolan has tons of cash, but if he (MSG) gets it I swear I\'ll take up butterfly collecting.

[miff]

JB,

Betfair big time Euro/Australia/New Zealand bet taker, partners with foreign investment bank from memory,deep pockets.Banging heads with other US ADW outfits for Internet/phone wagering supremacy via TVG.

Re NYRA,reports are conflicting but it seems like the State may want to lease the NYRA franchise with an option to buy or something like that.New twists/rumors every day on this, many probably not accurate.

A group wishing to manage NY racing gonna talk to Sheik Mo, Betfair and many other deep pocketed racing/sports oriented organizations.Like the situation in New Jersey, a group consisting of very wealthy owners/trainers exploring the viability of coming up with a plan to present to Don Cuomo for control of NY racing. An investment bank looking at this right now.Ton on money/fees up for grabs here also, so one can imagine.

Would hope it gets better no matter who gets to run it, however if Albany pulls the plug on slot/casino racing subsidies,it\'s a goner over time.

Mike

[jerry]

Other than the bigotry and cynicism, a well worded response.

[jerry]

NYRA screwed itself. If they were a well managed organization they\'d still be in business.

[PapaChach]

Me, too...Dolan would probably make Isaiah Thomas Director of Racing...

[miff]

DRF:

New York may solicit private company to replace NYRA as operator of state racetracks

By Matt Hegarty

A top aide to New York Gov. Andrew Cuomo said on Monday that the state is considering a plan to seek a private, for-profit company to replace the New York Racing Association as the operator of the state's three most high-profile racetracks.

Howard Glaser, Cuomo's director of state operations, said on a radio show Monday morning that the state is considering issuing a request for proposals to replace NYRA, the not-for-profit company that by law holds the franchise to operate Aqueduct, Belmont, and Saratoga until 2033. The option will be considered once NYRA's board is reconstituted with a majority of state appointees and the new board has time to assess the association's operations, Glaser said.

"We'll see when the new board is in place what the ultimate review will entail," Glaser said.

Glaser was interviewed on the radio show by Frederic Dicker, a radio host who also writes a column for the New York Post. On Monday morning, Dicker, who is writing an authorized biography of Cuomo, quoted unidentified sources as saying that the new board would seek private companies such as Churchill Downs Inc., the Stronach Group, or "the manager of major entertainment destinations" to replace NYRA.

Earlier this year, the state legislature, acting at Cuomo's behest, passed legislation requiring the dismantling of NYRA's 25-member board, which currently has 11 state appointees. The new board, to be in place for three years, will have 17 members, of which 12 will be controlled by the state, including eight controlled by Cuomo.

Glaser said Cuomo is expected to sign the legislation "soon," at which point he will make his eight appointments. Cuomo will also have the power to appoint the chairman. Currently, the NYRA board does not have a chairman. The term of the former chairman, Steven Duncker, expired at the beginning of September.

Rich Azzopardi, a spokesman for Cuomo, said on Monday morning that the governor would have no comment on his plans for NYRA's board or the information in Dicker's column.

Under an agreement reached in 2008 that allowed NYRA to emerge from bankruptcy, the state took the deeds to NYRA's three tracks and gave the franchise to operate the tracks to NYRA for 25 years. That agreement was approved by the legislature.

It is unclear if the state would need new legislation in order to nullify the existing agreement. Chris Wittstruck, a lawyer who is an authority on New York racing law, said that it is possible the new board could approve a plan to dissolve NYRA at the end of its three-year tenure, freeing the state to select a new operator.

"It's the simplest thing in the world for them to do that," Wittstruck said.

NYRA has not been cash-flow positive for more than a decade. However, that is likely to change for the 2012 fiscal year due to payments that NYRA has begun to receive from a massive casino that opened at Aqueduct late in 2011, 10 years after it was first authorized by law.

On the radio interview, Glaser said that the "legal franchise" continues to reside with NYRA.

"That doesn't change," Glaser said. "That was part of a legal agreement. But that's a different question as to who the operator is."

J. Gary Pretlow, the New York representative who is the chairman of the New York Assembly's Racing and Wagering Committee, said on Monday that he would be "opposed to any effort to privatize" the operation of the tracks.

"NYRA could work very well under the scenario we'd already put forward," Pretlow said. "That is, they would operate under the new board and very strict oversight from the state for three years, and then we'd let them try to work it out."

Cuomo and casino companies lobbied aggressively over the past year for gambling legislation in New York that would allow up to seven new casinos in the state. The state's existing eight casinos are tied to racetracks and are restricted to operating devices called video lottery terminals, which are essentially slot machines that are tied into the state's lottery system to get around the state's constitutional ban on slot machines.

The legislation allowing for up to seven new casinos was passed earlier this year, but that legislation, which would put a constitutional amendment on the ballot, would have to be approved again by the legislature next year. The constitutional amendment would then have to be approved by a statewide referendum before the state could begin awarding casino licenses.

If the effort is ultimately successful, the existing legislation providing subsidies for tracks and horsemen from the operation of the video lottery terminals would not apply to the new casinos. The existing operators of casinos, including Genting New York, which operates the Aqueduct casino, are expected to be first in line when applying for the new licenses, which would also allow them to operate table games in addition to any type of slot-machine-like device.

Casino companies have been eyeing the sprawling property at Belmont Park in Elmont, Long Island, as a possible casino location for a decade. Several months ago, the state's New York Racing Franchise Oversight Board approved a plan to solicit bids for two parcels of land on the property for redevelopment. The RFP for the parcels said that the property could not be used for video lottery terminals, though the RFP did not place any specific prohibition on other gambling activities.

Cuomo sought the dissolution of NYRA's board after the association came under intense scrutiny last winter because of a takeout scandal and a rash of catastrophic breakdowns at Aqueduct. Cuomo and his aides have said that the two problems indicate that NYRA's management is failing to operate the tracks successfully.

"The functioning of NYRA is substandard," said Glaser on the radio program.

An investigation by the Inspector General into the takeout scandal has been conducted but has not been released. In addition, a report examining the rash of Aqueduct breakdowns was completed more than a month ago and distributed to Cuomo's office, but the office has declined to comment on the report.

[BitPlayer]

Is anyone making money running racing without slots?  Do we think the new operator would still get a chunk of the slots revenue?  I suppose I can see where the horsemen might want the business just to preserve their livelihoods, and the ADW business might have some value standing alone.

[plasticman]

Its only a good idea if Stronach or Churchill doesnt get a hold of these tracks. That would create a mini-monopoly which is not good for anyone. We need some new and fresh owners to create more competition.