ALBANY, N.Y. (AP) – The New York Racing Association, the private entity that has held the state horse racing franchise since 1955, filed for protection from creditors in bankruptcy court Thursday.

“Chapter 11 bankruptcy does not mean going out of business,” said NYRA president Charles Hayward.,”In fact, it is a constructive process that allows NYRA the opportunity to achieve financial reorganization.”

Hayward said filing for bankruptcy court protection was a “last option.”

“The goal of the filing is to maintain the current schedule of racing dates, purse structure, stakes program and all other racing operations,” he said Thursday.

Two major coalitions – Empire Racing of Saratoga Springs and Excelsior Racing Associates – are vying for the franchise as well. A decision on the franchise could be made in Albany within the next few months.

On Monday, the state’s racing board released the $19 million to NYRA, but NYRA officials said Thursday that it comes with too many restrictions. Specifically, Hayward said the state hasn’t allowed NYRA to proceed unfettered with installing video lottery machines, known as video lottery terminals or VLTs, at the Aqueduct race course in Queens. NYRA has been counting on the revenue to stay afloat and to be in a position to win a 20-year extension on the franchise.

“VLTs at Aqueduct represent cash flow to our industry,” Hayward said. “The continuation of New York racing – the premier brand in North America – and over $400 million per year for the state’s budget for education, $60 million for the (state) lottery, and $50 million for purses and breeders awards.”

The oversight board awarded the money on the condition that NYRA officials don’t file for bankruptcy – dissolution of the business – in the next six months.

NYRA has also warned the state that if it is forced out of business by state inaction or loses the franchise, it would go to court over ownership of Aqueduct, Belmont and Saratoga race tracks. NYRA contends it owns the tracks, while the Pataki administration said the state owns the facilities.

There was no immediate comment from the state racing committee.

NYRA has contended it can’t survive under its current form in the face of growing competition by casinos, lottery games and off-track betting.

AP-ES-11-02-06 1807EST