The nation’s financial crisis has stepped up efforts to prod state government in New York to select an operator for the long-stalled video lottery terminal casino at Aqueduct, and launched a renewed effort to bring VLTs to Belmont Park.
With the state’s deficit worsening by the week, the legislature’s top Republican is pushing Gov. David Paterson to immediately select from one of three bidders vying to operate a facility that will include 4,500 VLTs at Aqueduct.
“We need to award the contract for VLTs at Aqueduct," Senate Majority Leader Dean Skelos told Paterson during a public meeting called to address the state’s fiscal problems.
New York, given its heavy financial sector, is especially vulnerable to the current national economic meltdown. The state relies on Wall Street activity for 20% of its tax revenue. And Paterson at the meeting said the state needs to close what he believes will be a $2-billion budget gap in the current fiscal year, without raising taxes. And next year’s projected deficit could approach $9 billion, recent data suggests.
Enter VLTs. The state approved VLTs at racetracks in the weeks after the 2001 terrorist attacks as a way to drive more revenue to the government in the form of revenue-sharing with the tracks. But, for a whole series of reasons involving either the New York Racing Association or the state, the Aqueduct facility has been stalled from the start.
With the deficit growing in New York, Skelos and others said Paterson, who promised a decision on the matter months ago, needs to act now. Estimates are that the state is losing $1 million a day in VLT revenue-sharing proceeds without the casino open. And it will take a year to build the facility.
The more immediate lure, however, is the upfront payment the three bidders are offering the state for the contract. Delaware North has put the most--$370 million--on the table in a one-time payment for the casino rights. Developer SL Green and its partners have offered $250 million, while Capital Play would give the state $100 million. (For the racing industry, the casino will be worth millions each year in additional money for NYRA’s operating and capital budgets, as well as purses and breeding funds.)
The state’s current budget already anticipates receiving $250 million from the winning bidder of the Aqueduct casino franchise.
But the Republican legislative leader also sees in the current economic plight a new opportunity for a Belmont casino. Skelos, who represents part of Nassau County on Long Island, earlier this year advocated for a casino at Belmont. That push was rebuffed, chiefly by the Democratic-led Assembly, whose leaders argued they did not want a proliferation of gambling downstate, and wanted to give a new casino at Aqueduct time before allowing a new casino competitor.
With tax cuts off the table, Skelos is using the financial plight as renewed ammunition to bring VLTs to more than just Aqueduct. In the meeting, he told Paterson the state could reap $350 million this year if it were to permit the awarding of a VLT contract for the track.
Paterson took no position. Later, his aides said the Aqueduct casino plans are still being reviewed. A spokeswoman said because of the problems in the nation’s credit market, the state has “directed the bidders to update the financial assurances they had originally provided” to the state.
