A deal to entice New York racetracks to install video lottery terminals was close the evening of April 28, but officials acknowledged a side deal is being hammered out to bring VLTs to the state's off-track betting parlors.Senate Majority Leader Joseph Bruno, the racing industry's best ally at the state capital, was growingly frustrated that tracks have not begun the program approved in October 2001."We haven't been able to get the VLTs operating in the racetracks after we did the enabling legislation, so we're very concerned and we're looking at other places," Bruno said.The OTB plan, urged by some OTB officials for more than a year, has gained steam because the state views it as a huge potential source of revenue. The state is facing a $12-billion budget deficit, and officials originally were hoping racetrack VLTs would have been operating by now."We need the revenue, and we're going to have to ramp up the revenue, and that's why all these things are on the table," Bruno said.New York City officials, facing their own huge shortfall, are said to be increasingly interested in the OTB plan, though they have kept their lobbying private. Bruno cautioned there is no conclusion to the VLT plan for OTBs "because it's very controversial." In New York City alone, officials have been looking at bringing 10,000 devices to three or four locations, including Manhattan.Bruno said negotiators from the Senate and Assembly are still working on a deal to bring more revenues to racetracks in the VLT program. He declined to give specifics but said the sides were only about one-half of a percent apart in the talks. It is unclear whether Gov. George Pataki, who has been on-again, off-again in his state budget involvement, is taking part in the VLT talks.The current law gives the racing industry 25% of VLT revenues, of which half goes to the tracks. The tracks say they need more just to break even. One plan has been to lower the take destined for the state Lottery Division, which will operate the program, from the 15% under the 2001 law to 10% or 12%. The tracks would get a part of that added split and the state's education budget would get the rest.Throughout it all, lobbyists for the racing industry and lobbyists for the OTBs gave conflicting information. Racing industry officials insisted the OTB plan was dead, while OTB lobbyists said fiscal negotiators were actively discussing various formula plans for how a VLT program would work at the parlors."It's going to happen," one OTB lobbyist said.