Posted By: Tom Hustler

By MICHAEL GORMLEY, Associated Press Writer

ALBANY, N.Y. - After a conference in bankruptcy court Friday, the state gave the New York Racing Association $8 million to continue operating thoroughbred racing. ADVERTISEMENT
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"This will give us the extra money to continue the operation," NYRA spokesman William Cunningham said.

The state's racing committee said the $8 million was a loan.

Cunningham, NYRA's new spokesman and a former top adviser to New York City Mayor Michael Bloomberg, said the court action is more cash than the state had been willing to release from a $30 million bailout for NYRA approved a year ago. He said the funding released Friday also doesn't have the restrictions the state had sought.

Scott Reif, spokesman for the state's racing committee, said the state had been willing to provide $19 million, but had wanted assurances NYRA wouldn't declare bankruptcy.

That could threaten racing at Aqueduct, Belmont and Saratoga race tracks as well as the plan to award a 20-year franchise to operate thoroughbred racing by Dec. 31, 2007, when NYRA's franchise expires. NYRA is one of three major consortiums bidding for the next franchise.

NYRA has operated thoroughbred racing in the state since 1955, but in recent years has faced state and federal prosecutions over mismanagement. Three years ago NYRA brought in a new management team, headed by CEO Charles Hayward.

On Thursday, NYRA announced it would seek protection from creditors by filing for Chapter 11 bankruptcy. The filing doesn't mean NYRA is going out of business, but allows the private entity to continue operations with less pressure from creditors.

NYRA has blamed the state for failing to promptly approve the installation of video slot machines at Aqueduct, which would provide hundreds of millions of dollars in revenue. NYRA contends casinos, video slot machine centers and other gambling options have squeezed it toward insolvency.

The state is now considering bids to operate New York thoroughbred racing for the next 20 years.

Empire Racing, based in Saratoga Springs, includes Churchill Downs and Magna Entertainment along with horse owners and breeders. Another bidder is Excelsior Racing Associates, led by New York Yankees partner Steve Swindal and casino developer Richard Fields.

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