May 22, 2012

New York Gov. Andrew Cuomo on Tuesday took power away from the state's troubled racing overseer, creating a temporary board under the control of political appointees to run racing for the next three years.

The move by Cuomo to replace 25 board members who come primarily from the racing scene comes as the world's horse racing spotlight turns to New York and the Belmont Stakes on June 9. That's when I'll Have Another, winner of the Kentucky Derby and Preakness Stakes, will try to become the first Triple Crown winner in 34 years.

It also follows years of scandal, bankruptcy proceedings, a state bailout and last week's firing of two top NYRA officers after the Cuomo administration learned that $8.5 million in winnings was kept from bettors last year.

Cuomo said his action has nothing to do with the Belmont race but was driven by a declining racing industry that is becoming more reliant on video slot machines - and may need to embrace casinos - to survive.

The new board is charged with enhancing racing at Belmont, Saratoga and Aqueduct race tracks, although officials would not say exactly what that might mean. The new board will also help mesh horse racing with video slot machines and other electronic gambling as Cuomo pushes to expand gambling in New York for jobs and tax revenues.

In addition, the new board will determine the top executive positions. NYRA had replaced its president a week ago during a continuing state investigation.

"If we're really smart, we'll bring these entire pieces together - racing, wagering and gaming," Cuomo said.

Cuomo said the NYRA board of directors, which has run thoroughbred racing in New York since 1955, unanimously approved the temporary board in a vote on Tuesday.

"Governor, you have the full support of the NYRA board," said Charles Wait, NYRA board member. He said NYRA recognizes the need to restructure in the light of a future that could include casinos.

As leverage, Cuomo had threatened NYRA's franchise to run racing and withheld the critical cash flow from video slot machines at Aqueduct.

NYRA's current board is made up of 14 members appointed by NYRA and 11 appointed by government officials. The new board will have 17 members. Cuomo will appoint the chairman and seven members, NYRA will appoint five, the Senate and Assembly will each choose two. Breeders and horse owners will have non-voting representatives. No appointees were identified Tuesday.

Under the plan, NYRA would resume control of its board after three years, but those could be transformative years for Belmont, Saratoga and Aqueduct.

Cuomo said the new board will discuss all current options, including adding electronic gambling, building casinos at Belmont and/or Aqueduct, and whether or not to keep Aqueduct running just a few miles from the more popular and prestigious Belmont track on Long Island.

"We know that long term this is not a venture for government to run," Cuomo said.

The Democrat is pushing for an expansion of gambling in New York including Las Vegas-type casinos run by private developers, rather than Indian tribes that currently can operate casinos under federal law. Cuomo made a proposal by a casino developer to build the nation's largest convention center at Aqueduct in Queens a prominent part of his State of the State speech this year.

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