The New York Racing Association ("NYRA") filed for Chapter 11 bankruptcy protection on Thursday, November 3. The NYRA is a private entity which has held the state horse racing franchise since 1955.

NYRA's franchise is scheduled to expire on December 31, 2007. Earlier, the state legislature and Gov. George Pataki authorized a $30 million state bailout. NYRA has sought to require the state to release $19 million without restrictions, but NY's racing committee has resisted, instead seeking a release in installments.

The state racing board did release the $19 million to NYRA on Monday, October 30, but NYRA officials said that it had too many restrictions attached. Specifically, the restrictions would not allow NYRA to install video lottery machines at the Aqueduct race course in Queens. NYRA says that the video lottery machine revenue would allow it to stay afloat and win a 20 year extension on the franchise.

Another condition of the release of the $19 million was that NYRA not file for bankruptcy protection.

NYRA president Charles Hayward said that the filing does not mean that the NYRA is going out of business, but instead will allow NYRA to reorganize while continuing to conduct thoroughbred racing. He also stated that the filing was a last option.

Meanwhile, the state racing committee has said that NYRA's filing threatens the state of uninterrupted racing in New York. A spokesman said that the state has provided support to NYRA, including providing them with nearly $300 million in grants, loans, subsidies and access to private sector capital.

Empire Racing of Sarasota Springs and Excelsior Racing Associates are competing for the state racing franchise. A decision on the franchise could be made within the next few months. NYRA has warned the state that if it is forced out of business or loses the franchise, it would go to court over ownership of Aqueduct, Belmont and Saratoga race tracks. NYRA claims ownership of the tracks while the state contends that they own them.

NYRA's competitors for the franchise are using the bankruptcy to question NYRA's management and to push their bids to gain the franchise.

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Ray