New York Gov. George Pataki has proposed new competition for racetracks with a plan to have the state sell eight video lottery terminal franchises to hotels, off-track betting parlors, and other entities.The program, unveiled Jan. 20, will be run by the state Lottery Division, the same agency that oversees the racetrack VLT program. It permits the agency to award VLT licenses on a competitive bid process.Though licenses can't be given to facilities located within 15 miles of a racetrack, lobbyists for the racing industry have vowed to fight the proposal. They said the plan undercuts the racing industry at a time when it is investing heavily in upgrades to convert tracks to racinos.The tracks were granted VLTs under 2001 legislation. The first racino is scheduled to open at the end of January at Saratoga Raceway.The Pataki plan says no more than five of the new VLT franchises can be awarded in New York City; they would only be allowed south of 59th Street in Manhattan, and in Brooklyn and Staten Island. No facilities would be permitted in Westchester, Putnam, or Rockland counties.The budget envisions $325 million in revenue from racetrack VLTs this year. It expects VLTs to be operational this year at Saratoga, Buffalo Raceway, Finger Lakes, Monticello Raceway, and Batavia Downs. Other tracks in line for the machines are Aqueduct, Vernon Downs, and Yonkers Raceway.When all the tracks and franchises are operational--over the next five years--Pataki projects $2 billion in annual revenue for the state.