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To: quidditch who wrote (5174)	8/9/2001 7:51:40 AM
From: LLLefty	Read Replies (1) \| Respond to of 6516

Quidditch (Who says you don't follow esoteric sports?) If I could find the "italics" and had the patience, I would try to follow a neat, well-organized format in replying to your good questions. The loss of NYOTB is no rpt no mortal blow to TVG; not much of a scratch, either. Actually, the TVG-NYRA-Churchill Downs bid had fallen apart earlier. The joke about the NYOTB is that is it is only bookmaker in the world which loses money--several million a year on a billion-plus handle. OTB's are filthy, clerks strongly unionized and overpaid (Remember the wages of NY public school janitors?), surly and some not above short-changing immigrant patrons. TVG's aim, as I see it, is to dominate interactive wagering. It does a good handle from Louisville, where it all started about five or six years ago. But it is playing by the rules and avoiding the Federal eye. Frank Stronach is becoming the Bill Gates of the racing industry. An Austrian (or is it Hungarian?)-born Canadian, he owns Magna International, an auto parts manufacturer. He is buying up every race track he can get his hands on, runs a huge racing stable and is a huge thorn the TVG-NTRA (National Thoroughbred Racing Association) alliance to build back what once was--racing as a premier American sport. Allow me to stop here before my ancient Mac freezes.

To: quidditch who wrote (5174)	8/9/2001 10:07:17 AM
From: LLLefty	Respond to of 6516

Quid A bit more, though freezing isn't exactly a cuss word around my parts (MD) today. Guiliani's award to Stronach is far from over. It requires approval from the State Legislature. The NYRA, which may have no money but has friends there, will contest it strongly. Why did Guiliani give it to Stronach? Stronach has several partners in his bid, among them some wealthy NY real estate folks. I wouldn't say that's the reason; NYRA probably would have wanted to pay $1 down and a $1 a week for it. Stronach, who has heavy interests in a telephone wagering operation, competes with TVG. He refuses to give TVG patrons access to wagering on his tracks, including two majors--Santa Anita and Gulfstream. BTW, his Magna International (MGA) is a $5B firm whose stock is at a year's high. His race track holdings are folded into MIEC, which likewise is touching a high. For a profile, see: collections.ic.gc.ca

To: quidditch who wrote (5174)	8/9/2001 3:50:51 PM
From: LLLefty	Read Replies (1) \| Respond to of 6516

OT for Quidditch You asked why did Canada's Stronach win NYC's OTB. That question is asked in the trade press as well since the NY Racing Assn. was the logical victor. Since the decision, the NYRA, which runs NYC's three major tracks on a non-profit basis, has gone ballistic. Stronach rubbed it in the other day, saying he plans to bid for the NYRA's contract when it comes up for renewal in a few years. Here's one analysis, as written some days ago in the Daily Racing Form, on why it went to Stronach and,to some extent, why it may not pass the squeaky-clean test: Calculations favored Magna By MATT HEGARTY New York City used different formulas to calculate the value of the bids placed by partnerships seeking New York City Off-Track Betting Corporation, an economist said Friday. The discrepancy partially explains why Magna's winning bid appeared to be much larger than the runner-up. The difference between the city's estimated value of the bids - $389 million by a partnership headed by Magna Entertainment and $276 million by a partnership headed by the New York Racing Association - was cited as the primary factor for the selection of Magna on Thursday as the winning bidder. The selection is subject to legislative approval, which is considered unlikely this year. Mayor Rudolph Guiliani cited the $113 million difference when he said on Thursday the decision was a "no-brainer." It is not clear how the city made the calculations. Both of the bidding parties pledged a nearly identical amount to the city in up-front cash payments, $260 million by Magna and $250 million by NYRA. The partnerships differed in how much they would pay to the city annually from a cut of the handle. Those differences were used to make projections that separated the bids by $113 million. Magna has pledged to pay the city at least $2 million a year, which the city valued at $139 million, and NYRA has promised to pay the city at least $1.1 million, which was valued at only $26 million a year. An economist with knowledge of both bids said Friday that the city could not have arrived at the projections it cited Thursday without inserting a variable that benefited the Magna partnership. The economist spoke on the condition of anonymity because of a relationship to the bidding groups. "There is definitely something in there that is recognizing an upside to the Magna bid," the economist said. City officials did not return phone calls on Friday. Wilbur Ross, the financial adviser hired by the city to estimate the value of the bids, did not return a phone call or respond to a fax of written questions. Both NYRA and Magna were asked to provide a "wish list" of legislative changes to factor into the value of their bids. The variable the city used that increased the value of the Magna bid was likely affected by how each party envisioned future operation of OTB. For example, the city could have assumed that Magna would be able to increase handle at a much faster rate than NYRA because of the importation of additional simulcast signals, the economist said. That would push handle up at a higher rate and also allow the city to benefit from larger cuts of the wagering dollar. Handle growth has been fairly static the past several years at OTB. Last year, handle through OTB's 75 locations grew 1.25 percent, from $1.002 billion to $1.050 billion.