HARNESS TRACKS OF AMERICA Executive Newsletter

HARNESS TRACKS OF AMERICAExecutive NewsletterA daily fax and e-mail report on racing and gaming developments in North America and beyondStanley F. Bergstein, EditorThursday, May 6, 2010NEW CONTROVERSY FOR NYRAThe New York Racing Association, which hasmore controversial issues than Walgreens haspills, is seeking help in Albany again. The problemthis time is NYRA’s inability to video streamits races, a privilege it says could generate $2 milliona year for the strapped racing outfit. Undercurrent law, people can bet on NYRA races online,but can’t watch the racing on either NYRAor off-track betting sites. Help is on the way, inthe form of approval of a bill by the New YorkSenate racing commission, which has approvedvideo streaming for NYRA and OTBs. The measure,S.6895, would allow NYRA to stream itssignals on its Web site, and NYRA’s presidentand CEO says it could generate the $2 millionpredicted revenue in the first year and “substantialincreases going forward.” He also says OTBshould be allowed to videostream “assuming thatwe can reach a suitable business arrangement,”but adds that videostreaming “is only one of themany business operations that should be consolidatedbetween NYRA and the OTBs, but theredoes not appear to be serious interest to do anyof these initiatives.” The proposed bill would allowtracks and OTBs to expand the market andbetter compete with out-of-state betting outlets,including Youbet.com, which can and does showNYRA races. The Senate racing committee approvedthe measure on Tuesday and sent it to thefull Senate with a do-pass recommendation. Nomatching bill has been introduced in the Assemblyas yet. The Saratogian in Saratoga Springssays that house may be waiting on an omnibusracing bill, rather than tackling issues one at atime. New York Governor David Paterson hasproposed giving NYRA $17 million as an advanceon future racino revenues, estimated toreach $250 million a year. NYRA could repaythe loan from racino income, but it is nineyears since the racino was approved andcould be another nine before it is built.NEW LAWSUIT IN MARYLANDWhile the Aqueduct racino project holds thecurrent record for longevity without life, it mayultimately be threatened by events in Maryland,where the years are piling up on slots in the state,now two years old and aging. Now a new delayappears on the horizon, as a complaint was filedthis week in circuit court in Annapolis, takinga new tack on challenging a public referendumvote on barring slots at the Arundel Mills mallbetween Baltimore and Washington. The newsuit, backed by the giant Cordish Corporation,which hopes to build the casino, claims the referendumis unconstitutional because the countycannot hold a referendum that conflicts with statelaw. The suit charges the Anne Arundel Countyboard of elections and Maryland unlawfullycertified the petition allowing the referendum tomove forward. It also questions the motives ofthe Maryland Jockey Club, which paid a privatecompany to help collect petition signatures.BIG DERBY, AND BIG LOSSESDespite an announced attendance of 155,804,high television ratings, and record revenues of$75 million, the rest of the Churchill Downs pictureis not quite as bright. The company saw itslosses for the first quarter, traditionally a toughtime, rise from $4.83 million a year ago to $8.67million this year. The big increase was attributedto expenses in buying Youbet.com and $1.1million in startup costs for the January openingof its Calder Casino and Race Course slots parlor,according to the Louisville Courier-Journal.Quarterly losses of 64 cents a share compared to36 cents a share a year ago, when revenues were$73.74 million for the quarter. Chief financialofficer Bill Mudd told the newspaper that “Overall,we’re pleased with the results.” Churchill’sTwin Spires ADW betting was up 8% for thequarter.