Great opportunity at hand

From San Jose, Costa Rica

Seven years ago, a couple of friends, one of whom owned a mare, and I agreed that it would be a good idea to breed a horse, specifically a New York-bred. If we were fortunate and the resultant horse had enough ability to race competitively in New York, the state-bred program already in place and revenue from the video lottery casino at Aqueduct that loomed on the horizon would result in huge purses. The risk-reward equation worked.

Today, not yet realized VLT revenue again looms on the horizon, the mare produced from that breeding is a five-year-old awaiting an appointment to be bred and the racing industry in New York only on Wednesday took a deep breath, rose from the canvas and stood up.

It has been a long, often strange trip that began with a scandal in the mutuel department at the New York Racing Association initiated by a phone call to the office of Eliot Spitzer, then attorney general, from a fired employee that snowballed into a federal indictment. From there, things went downhill. Construction of the VLT facility at Aqueduct was halted. People went to jail and lost jobs. There were, to be sure, innocents among the victims of what seemed an institutional paranoia.

As NYRA circled the wagons, short money made maintenance a luxury. Belmont and Aqueduct deteriorated. Several key people took advantage of a longstanding rule that made employees whose age and term of service equal 75 eligible for retirement and staff shortages became critical in every area. Others left for jobs with more stable futures. NYRA had seen crisis before, but not to this extent. Looking squarely at the expiration of its franchise at the end of 2007, it appeared that the organization in control of racing in New York since 1955 had little chance of survival.

Possession being nine-tenths of the law, NYRA’s ace in the hole, even as it filed for Chapter 11 bankruptcy protection, was the question of ownership of the land at Belmont, Aqueduct and Saratoga. NYRA held the deeds and receipts for a half-century of property taxes. The state, for all its bluster, would be hard pressed to win this battle in court and the process would have brought the end of racing at what has long been the most important market in the nation if not the world.

Politics in New York being what it is, the challengers to NYRA’s bid for the racing franchise were all found to have damning entanglements and were in the end incapable of sustaining themselves. Their efforts also hinged upon the state proving that it owned the three properties. In time, support unraveled, leaving NYRA as the only alternative.

Nevertheless, the process that led to Wednesday’s passage of legislation that settles the issue and secures the next quarter-century of racing was painfully convoluted by political bickering and posturing that extended past the eleventh hour.

NYRA, once the details of emerging from bankruptcy are complete, is faced with the task of reconstituting itself, rebuilding its staff, refurbishing Belmont Park and Aqueduct; resuming long-shelved marketing and promotional efforts. NYRA must, almost from scratch, build a better organization than it has ever been in the past. The days when it was essentially a club established by and for the benefit of a handful of wealthy horse owners is long gone and will never return. The world and the racing industry have changed much more rapidly than NYRA and that is the source of the difficulties it is now in position to overcome. NYRA, if it is to work, must be very different than it has ever been.

Revenue from VLTs is still a year away. The structure of New York City OTB remains an unattended problem and the disposal of the current dispute between New York City Mayor Michael Bloomberg and the Albany establishment is critical. Ideally, the two franchises will be joined, a move that in concert with the additional source of alternative gaming revenue would create a robust environment, the largest purses in the nation, which in turn lead to a level of competition seen nowhere else.

Great opportunity is at hand. With it comes great responsibility.

Aqueduct: Feb. 15

Only Great Expectations, second race, qualifies as a potential play but is certain to be an unplayable price.