As The New York Times revealed in an eye-opening investigation of thoroughbred racing locally and throughout the nation, horses are dropping dead on the track in appalling numbers. The Times inquiry sparked a state investigation of the industry in New York. The probe found evidence of the worst sort of greed and lax enforcement of safety regulations. Twenty-one horses died on the track at Aqueduct during last winter’s meet. Investigators concluded that 11 of those animals would not have died if the state properly regulated medication and if racing authorities did not allow less-than-stellar horses to compete for casino-inflated purses.

The New York Racing Association runs the tracks and oversees, if that’s the right word, the sport’s rules and regulations. But it has become clear that NYRA has been poorly managed and operated in the best interests of horse owners. Gov. Cuomo already has instituted a series of reforms aimed at toughening regulation, but the state report shows that even more aggressive action is needed.

Ironically, greater government oversight is required in part because of the growth of racetrack casinos, or racinos. The horse industry begged state officials to allow slots and table games at some racetracks to supplement purses and to get people to the track at a time of rapidly declining attendance. Revenue from the racinos has led to inflated purses, which has led to many of the abuses cited in the state report. Owners, trainers and others involved in the industry have added incentive to get horses on the track, regardless of their health or talent.

The result: carnage on tracks around the country. Horses that should not be running because of injury or because they’re simply not very fast have been marched out to the track and have broken down and died. Of course, horses aren’t the only species put in danger by greed and mismanagement. Jockeys put their lives on the line every time they get in the saddle—it’s remarkable that more of them haven’t been killed or seriously injured as a result of spills.

Government regulation is not always the best remedy for an industry in crisis. Indeed, it is often the worst remedy. But the sad condition of New York racing demands prompt and aggressive action from state officials.

There can be no more carnage on New York’s racetracks.

A Javits casino? Don't bet on it. (Inhabitat)

After years of opposition, Assembly Speaker Sheldon Silver has decided to roll the dice on Governor Andrew Cuomo's dream of opening a casino in New York City. There is just one house rule, according to the Daily New's Albany bureau chief Ken Lovett: not in my backyard. (He's just as parochial as his constituents!)

The locations Silver is open to a casino include Coney Island—where Borough President Marty Markowitz desperately wants one—the new Mets megamall at Willets Point and the so-far-failed plans for one at Aqueduct. But proposals like Times Square and at a rejiggered Javits Center are definitely out.

Some insiders want a casino to be part of a redevelopment of the Jacob Javits Convention Center on the West Side. But Silver remains adamant about keeping gambling dens out of Manhattan and other densely populated parts of the city, the source said.

Lovett's source claims “one or two other sites (in the city) could pop up as we move forward," and it also remains quite possible no casino could win the support of the Legislature.

Meanwhile, another Albany bureau chief, the Post's Fred Dicker, reveals that the Legislature is willing to alientate land in Flushing Meadows (an act that always requires state approval) to make way for an MLS soccer pitch to be built there.

This would be a boon for the Mets megamall, but another loss for the West Side of Manhattan, where it was hoped an MLS stadium might help prop up a collapsing Pier 40, along with the rest of the funds-starved Hudson River Park. So much for that.

A casino with Alexander Calder sculptures? Only in Queens! (Genting)

What happens when you throw two strangers into a Subaru and ship them out to Queens to check out the new convention center site?

The Times grabbed Barbara Buzzell, 75-year-old interior designer from Long Island and Gerald Yuska, 30-year-old owner of Breakwater Surf Company from Rhode Island, and put them up for the task.

"Unless you want to look at cockroaches or something, there’s no night life here," Ms. Buzzell said of the prospects of a convention center. Having attended four conventions a year for the past 30 years, she commented that "participants generally wanted to go to Broadway shows and the best restaurants."

Mr. Yuska, who couldn't care less about theater, was considerably more optimistic about the plan: "The only way to make a place better is by going in there and developing it." Even after a person in the Toyota next to them on the parkway gestured an obscene sign at them, he thought it was "pretty awesome."

Cue trip to questionable Chinese and West Indian restaurants and shared fantasies about a Disney-esque monorail linking Manhattan and Queens. (Does the A-Train not count? It even has a song after it.)

Are their glasses too full?

Yes, too full of alcohol! The duo found themselves at the Resorts World New York City casino center in which Ms. Buzzell raised her Blood Mary and toasted to their friendship.

Lesson learned: it only takes a little alcohol to bear the fast food wrapper lined streets of Queens.

mewing@observer.com

This comes as no surprise. The other two bidders—Penn National Gaming, and a consortium of SL Green, Hard Rock and Clairvest—were disqualified in early July after they failed to meet the bidding process requirements.

"Genting's proposal was impressive on many levels," reads the letter from New York Lottery director Gordon Medenica to Governor David Patterson. The governor has promised to abide by the lottery's recommendation. "They are a vastly experienced and professional gaming company and their proposal reflects a deep and insightful understanding of the opportunity and challenges of Aqueduct. Genting took nothing for granted—they respected the very rigorous selection process that we developed after the missteps of the past. They understood the business risks that a winning bidder is required to accept, and they have a clear and rational plan for navigating the complex construction and operating environment of New York City. In addition, they are highly sensitive to the community issues, labor requirements and social concerns that a project of such scope encompasses."

The full letter is copied below.

This recommendation in no way ensures that the transformation of the run-down racetrack into some sort of entertainment mecca will actually take place. The search for a suitable gaming operator has been ongoing since the Pataki administration, and has been plagued by incompetence and accusations of corruption.

Here's the letter.

August 3, 2010

The Honorable Governor David A. Paterson

State Capitol

Albany, NY 12224

Dear Governor Paterson: 

Attached is the report from the Lottery's Evaluation Committee on the selection of a developer and operator for the Video Lottery Facility at Aqueduct Racetrack. It is with genuine enthusiasm that the Committee unanimously recommends Genting New York as the winning vendor. Our strong recommendation, based on the merits of the proposal, was vastly reinforced by Genting's financial offer of $380 million as an upfront licensing fee.

Genting's proposal was impressive on many levels. They are a vastly experienced and professional gaming company and their proposal reflects a deep and insightful understanding of the opportunity and challenges of Aqueduct. Genting took nothing for granted - they respected the very rigorous selection process that we developed after the missteps of the past. They understood the business risks that a winning bidder is required to accept, and they have a clear and rational plan for navigating the complex construction and operating environment of New York City. In addition, they are highly sensitive to the community issues, labor requirements and social concerns that a project of such scope encompasses.

Genting's proposal was far superior, in concept, scope, detail and execution, to any we have seen in previous rounds of evaluation. It is well known that other bidders, and potential bidders, found the State's requirements too demanding to accept. They made the fatal assumption that the process was still open to maneuvering and negotiation. We acknowledge that the process was tough and the expectations were rigorous, but our requirements were crystal clear. For Genting to emerge from such a grueling process as a strong winner is a testament to the effort, skill and intelligence of their team. Every aspect of their proposal demonstrated the highest standards of professionalism and respect.

The attached report details our process, findings, analysis and scoring of the proposal. Even after we disqualified non-conforming bidders, we still followed the process, as originally outlined, for the remaining bidder. This included an exhaustive vetting of the company, its investors, and key personnel for licensing qualifications, and we found the company and its personnel fully qualified for video gaming licenses. We also retained KPMG to advise the Committee on the financial capability of Genting, and we concluded that Genting was uniquely qualified and highly capable of delivering the substantial financial results we expect from this project.

While you, Governor, have already committed to supporting this recommendation, we urge our legislative leaders to quickly add their support in order for the State to receive, finally, the massive influx of monies that this project will generate. Genting New York was not the only bidder for this project; it was the best bidder for this project. And Genting New York is not the only winner of this process; the people of New York, through jobs, economic activity and aid to education, are the bigger winners.

Sincerely,

/s/ Gordon Medenica

drubinstein@observer.com

Readers no doubt will recall that the long-stalled plan to build a slot-machine casino at the Queens racetrack collapsed several months ago when the state awarded, and then pulled, a contract with an outfit called Aqueduct Entertainment Group. The company had no track record, so to speak, but it had powerful political supporters, including former Queens congressman the Rev. Floyd Flake, who had hooks into the State Senate.

Governor Paterson reversed his decision to award the contract to AEG after a huge public outcry. But the scandal is ongoing, and so are the new revelations. Just the other day, the public learned that Senator John Sampson of Queens, the leader of the State Senate, gave an internal Senate document about the bidding process to a lobbyist who represented AEG.

Senator Sampson says he doesn't regret giving the lobbyist the document. After all, he says, the document was not confidential. Clearly, the man just doesn't get it.

The Aqueduct deal smelled worse than Aqueduct's stalls on a hot summer day. Were it not for newspaper investigations and a public outcry, AEG would be installing slot machines-assuming the company could figure out how to do it-right now, and its politically connected executives would be preparing to cash in big time.

It is all too clear what AEG and its allies in the Senate tried to do. You'd think Senator Sampson would understand that the public is outraged over this attempt at insider trading, Albany-style. But no, he sees nothing wrong with slipping a government report to a lobbyist.

The candidates for governor had better be paying attention. The State Senate is a mess, and somebody has to clean it up. Fast.

"With the new procurement plan, we think that we could have a winner within the month or June at the latest," Paterson said in an interview on the Capitol Pressroom, acknowledging the plan may not be popular with the legislative leaders. "Whoever is going to be the highest bid, and assuming that they will provide all of the services, they will be the winner."

He justified the decision by likening it to deadlock over state budget, and then gave an unusually strong plug for stronger executive authority.

"If you let three people act independently, it's likely they'll go on and on and on," he said. "In the end, decisions have to be made by one person ... you find that government acts a lot better that way."

The selection of a developer for the Aqueduct has dragged on for years, and was recently reopened after the Paterson administration dropped Aqueduct Entertainment Group—the bidder it declared a winner weeks earlier—in the face of criticism that the choice was influenced by politics. The governor then recused himself from the process. Should the state simply select the bidder, an internal scorecard reported by The Times last week suggests the SL Green bid is the frontrunner. 

Austin Shafran, a spokesman for Senate Democrats, emailed a response to the governor's plan suggesting the conference's top priority is a speedy pick.

"It all comes down to jobs," Shafran said. "We need to move this process along in a timely and responsible manner to start creating jobs for the local community without further delay."

ebrown@observer.com

The statement appeared to be a riposte at Assembly Speaker Sheldon Silver, who Friday stated a list of conditions (and sent a letter reiterating the point yesterday) that the bidder, Aqueduct Entertainment Group, must meet before he will sign off on the bid. [Clarified]

Here's Paterson's statement, which references the up-front financial demand (a $300 million payment to the state), and asserts that AEG can meet it. 

"AEG was selected to operate video lottery terminals at Aqueduct racetrack in a unanimous decision reached through the equal votes of the leader of the Senate, the Speaker of the Assembly, and myself. Each leader had equal statutory authority, equal responsibility and is equally accountable in this selection.

"AEG has both the financial viability and ability to pay the required upfront licensing fee. AEG complied with every request made during the review process and addressed satisfactorily all matters related to licensability. AEG's compensation to the State, both in the short term and the long term put it near the top or at the top compared to other bidders. Further, AEG's gaming operator, Navegante, has a verifiable record for establishing successful gaming operations. AEG's plan fits well within the very diverse and middle class community that exists around Aqueduct and its approach to operations will attract local community members to the site in the largest numbers and create local jobs for people in the surrounding area. AEG's commitment to diversity and inclusion was also an important consideration in choosing it to operate at Aqueduct.

"All information about the bidders and their bids was presented to all involved parties as we weighed this selection. After a lengthy evaluation process, I can only assume that the other leaders made their decision, as I did, because AEG offered the bid that received both unanimous support and is good for New York."

The governor has been relatively candid about the fact that he preferred another bidder (reportedly an SL Green-led team), but faced deadlock, as the State Senate leader, John Sampson, reportedly pushed AEG. On AEG's team is Rev. Floyd Flake, the former Queens Congressman who is close to state Senate President Malcolm Smith. Days before the selection, Mr. Flake suggested to the Times that he might endorse a gubernatorial run by Andrew Cuomo. Paterson, who already faces a significant financial disadvantage, would be greatly wounded if black Democratic leaders abandoned his candidacy to support Mr. Cuomo. (Paterson later met with Flake, after the selection, though the administration denied an endorsement was discussed). 

Also this afternoon, AEG issued a statement that seemed to try to move the discussion forward, saying they were now looking to finalize the deal with the state. The press release had a quote from the president of the influential Building Trades union lobby, Gary La Barbera, endorsing the selection.

"We are committed to complying with every condition set by the State and assuring the people of New York that we will be a great partner for years to come.  We look forward to completing the Memorandum of Understanding as quickly as possible and starting construction," said Jeff Levine, a developer and a member of AEG.

ebrown@observer.com

That's because New York State's Division of Lottery has finally reviewed all three proposals and deemed all three viable.

The parties vying for the chance to remake the dilapidated racetrack include SL Green in partnership with Hard Rock Entertainment; Delaware North Companies with Saratoga Harness Racing; and Capital Play, in partnership with Mohegan Sun, Extell Development and Plainfield Asset Management.

Morgan Hook, a spokesman for the governor, told ThoroughbredTimes.com that Governor Paterson, the Senate majority leader, Dean Skelos, and Assembly Speaker Sheldon Silver now "can begin to have discussions about which one will be best for the state."

Given the government's budgetary woes, it's a high-stakes game for both the bidders and the state.