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NYRA reluctantly rebids contentious contract

By Lombardo David
Tuesday, June 18, 2013

The New York Racing Association Board of Directors isn't looking forward to starting a new search for a firm to improve its online wagering platform.

Global Betting Exchange was tentatively hired last week, but a review of complaints from state regulators with the bid process has forced a new search to begin. Global Betting Exchange is allowed to bid in the new process.

The state's Franchise Oversight Board submitted a memorandum earlier this month to NYRA that described the hiring of Global Betting Exchange to improve NYRA's online wagering as unjustified. NYRA failed to follow its approved procedures when it searched for a firm to make the improvements, sending out a request for quotations that lacked minimum qualifications, had open-ended terms and failed to identify criteria that would be used to judge bids, according to the memorandum.

Based on these concerns, Franchise Oversight Board Chairman Robert Williams wrote, "It is not feasible to award the contract to [Global Betting Exchange]."

NYRA Board member Stuart Subotnick, who reviewed the state's complaints, argued in Tuesday's board meeting that most of the state's points are wrong. "There was one item [in the approved bid process that NYRA management] did not follow clearly," he said.

Noting a desire not to be at odds with the state, though, Subotnick recommended a new bid process. He added that this process has cost NYRA "a lot" of revenue and will mean a loss of $3 million to $5 million in additional revenue they anticipated generating in the fourth quarter of this year with the improved online wagering that would be created by Global Betting Exchange.

NYRA Board member Leonard Riggio was not happy with the board's decision to start the bid process over on what he described as a technicality. Because the board's audit committee reviewed and approved the initial bid process, he said the state's questions represented a vote of no confidence in the new board.

Complaints were also raised by NYRA board members about the failure of the state's Franchise Oversight Board to formally let the NYRA board now about its concerns with the bid process. NYRA Board Chairman David Skorton said, “We had a frustrating lack of communicaiton … maybe I should have dug deeper as chairman.”

Regardless, he added, “We can keep beating this .. or go forward.”

State regulators have expressed confidence that a new bid process can be done in 90 days.

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