Horsemen and raceway agree to binding arbitration

Dispute puts tracks’ license at risk

By FRITZ MAYER

MONTICELLO, NY — With millions of dollars and the tracks’ license at risk, the horsemen and Monticello Raceway have agreed to binding arbitration to settle a contract dispute. The New York State Racing and Wagering Board will conduct the arbitration.

Joe Faraldo, the lawyer for the horsemen, said he expects the process to be completed by June. He said the horsemen are looking forward to a resolution.

David P. Hanlon, the CEO of the company that owns the raceway, said, “We are very pleased with these developments and look forward to working through arbitration with our horsemen—some of the best in the business.”

The complimentary note is in sharp contrast to the recent bitterness expressed by both sides.

The main sticking point is the horsemen’s share of revenues from video gaming machines operated at Mighty M Gaming. The horsemen were getting 7.5 percent of the revenue last year, but they maintain the track owner promised them more.

In an effort to put pressure on the track, on January 1, the horsemen blocked the simulcast of races to out-of-state locations. The move dramatically reduced the “handle” of races, which was on average $750,000 a day in 2005. On January 2, the handle was $250,000. This loss also affected the horsemen because race purses were cut in half. The horsemen split the simulcast profits with the track, as well.

As the impasse continued, Faraldo said, “there was a question as to whether the racetrack would continue to operate video gaming machines.” Any disruption in that revenue would have been crippling to the track and the horsemen.

At that point, Faraldo said he and the horsemen went to the wagering board and asked them to arbitrate. He said the board was reluctant because the move is unprecedented in New York State, but the board ultimately agreed. The wagering board further pressured both sides by not setting a race schedule beyond Wednesday, February 15, which would threaten the track license.

The arbitration will determine the percentage of video gaming machine revenue the horsemen receive, and will also cover all other aspects of the contract between the track and the horsemen.

Cliff Ehrlich, vice president of operations at Monticello Raceway, said “in terms of purses and breaking records in competitive racing, 2005 was by far the best year we’ve ever had. Arbitration is the quickest way to get us back to that kind of operation.”

Out-of-state simulcasting resumed last week and purses have doubled.