Spitzer Will Choose NYRA To Run Racing

Governor Spitzer today will recommend that the bankrupt New York Racing Association retain control over New York's premier thoroughbred tracks, dealing a blow to three private bidders that sought to take the reins of the state's troubled horse racing industry, sources said.

The Spitzer administration is not seeking to shut out the private groups entirely. It is expected, perhaps as early as this week, to recommend awarding one of the bidders control over future casino gambling operations at Aqueduct and possibly at Belmont and Saratoga tracks.

The governor's office had previously indicated that it would turn over gaming operations to Excelsior Racing Associates, whose investors include William Mulrow, an investment banker who is friendly with Mr. Spitzer and Richard Fields, a casino developer whose large contributions to Mr. Spitzer's 2006 campaign attracted scrutiny. The other bidders are Empire Racing, which includes Churchill Downs and Magna Entertainment, and the Australia-based Capital Play, which has partnered with Mohegan Sun.

The other bidders have argued that NYRA has lost money in an industry that ought to be lucrative and that has done little to stop a steady decline in attendance.

Mr. Spitzer will submit his recommendation to the Legislature, the body that has final say over rights to the racing franchise, which has belonged to NYRA since 1955 and expires at the end of the year.

The speaker of the Assembly, Sheldon Silver, has not expressed a preference over who should run the tracks. A spokesman for the Senate Republican majority leader, Joseph Bruno, said, "We haven't precluded anybody from this process, including NYRA."

Mr. Spitzer's recommendation is the latest twist in a high-stakes battle involving major figures in the thoroughbred racing and casino world. Bidders have spent more than $2 million on lobbying and political contributions and have taken more than a year to develop proposals.

In the end, Mr. Spitzer sided with the nonprofit NYRA, a remarkable turn of events for a group that was mired in a tax-evasion scandal that led to federal criminal indictment in 2003. That year, Mr. Spitzer, who was then attorney general, accused NYRA of suffering from a "culture of criminality."

Kept afloat with tens of millions of dollars in state loans, NYRA filed for Chapter 11 bankruptcy last year and has sued the state, claiming it owns the track land in a bid to prevent Albany from taking away its franchise rights.

Federal prosecutors deferred indictment after NYRA agreed to have its business operations monitored by a court-appointed law firm, Getnick & Getnick in Manhattan. In 2005, the firm reported that NYRA had made significant improvements, including replacing its leadership and establishing a new code of ethics and safeguards against corruption.

Mr. Spitzer's move avoids further legal clashes with NYRA, but it also could help one of his donors, Neil Getnick, the managing partner of the firm. NYRA recently signed a multi-year no-bid contract with Getnick & Getnick worth $125,000 a month to help it implement and oversee its news integrity practices. The contract will be voided if NYRA does not retain the franchise.