New York Governor Spitzer Recommends Restructured NYRA Be Awarded Thoroughbred Racing Franchise

Separate VLT Operator to be Selected in Sixty Days

September 4, 2007 -- New York Governor Eliot Spitzer announced today his recommendation that the New York Racing Association (NYRA) be awarded the state’s racing franchise to operate Aqueduct Racetrack, Belmont Park, and Saratoga Race Course. He also announced his recommendation that a separate franchise be awarded to an experienced gaming operator to operate as many as 4,500 video lottery terminals (VLT) at Aqueduct. The recommendation of a VLT operator will be made within approximately 60 days.

“Thoroughbred racing is a vital state industry, providing tens of thousands of jobs to breeders, horsemen and workers who are directly employed at New York’s three thoroughbred tracks,” said Governor Spitzer. “Following my investigations a few years ago, a new leadership team at NYRA has turned the organization around to the point where it is demonstrating real results and true transparency. The strong performance of racing this season is a testament to how far NYRA has come in the last few years and this agreement ensures that racing in New York State will be operated by experienced management.”

The recommendation to award two separate franchises – one for racing and one for the gaming operation – follows an extensive review of proposals to hold the racing franchise at the three state-owned racing facilities and to establish VLT facilities. The new franchises – for racing and the VLT operation at Aqueduct – are scheduled to begin on January 1, 2008.

“After careful consideration, I concluded that a reconstituted NYRA is the best entity to operate thoroughbred racing in New York State,” continued Governor Spitzer. “The state, in consultation with NYRA, will choose an experienced gaming operator to operate the VLT franchise at Aqueduct. This will ensure that we have the best possible operator for both the racing and the gaming franchise.”

New York Racing Association Chairman C. Steven Duncker said: “Governor Spitzer’s support is a testament to the efforts undertaken by NYRA to become the racing industry leader in integrity and corporate governance. NYRA remains committed to continuing this effort while at the same time retaining its position as the producer of the best racing product in North America, as exhibited by the recently concluded Saratoga race meet. NYRA looks forward to working with the Governor and the Legislature to achieve the timely implementation of the necessary legislation, and to ensuring the uninterrupted conduct of world class thoroughbred racing.”

Governor Spitzer will seek legislative approval of his recommendations with respect to these franchises.

Earlier today, NYRA’s Board of Directors approved a Memorandum of Understanding (MOU) outlining the major terms of the 30-year agreement between NYRA and New York State, enabling the 52 year-old non-profit entity to emerge from bankruptcy and modify its governance structure.

The terms specify that:

- The NYRA Board will be downsized from its current makeup of 28 authorized members to 19, and include the direct appointment of 2 members by the Governor, 1 by the Assembly Speaker, 1 by the Senate Majority Leader, 1 each by organizations representing thoroughbred breeders and horsemen;

- Funds derived from VLTs be dedicated to: improving racing facilities at Aqueduct Racetrack, Belmont Park, and Saratoga Race Course; funding deficits from ongoing track operations, to increasing racing purses at the three racing facilities and to create a fund for New York State breeders;

- Thoroughbred racing will continue at Aqueduct along with a VLT facility; the historic character of Saratoga Race Course will be preserved; and any future development at Belmont Park will be required to be consistent with its status as one of the premier thoroughbred racing venues in the world; and

- NYRA relinquishes any claims it may have to ownership rights of the tracks and facilities.

A copy of the Memorandum of Understanding between New York State and the New York Racing Association is attached.

Source: New York Governor

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