New York Gov. George Pataki, called for action on dispute over casinos at racetracks.

New York Gov. George Pataki, called for action on dispute over casinos at racetracks.

Associated Press

New York Governor Calls for Quick Resolution to Slots Delay

With New York losing nearly $3 million a day, Gov. George Pataki Feb. 15 told legislative leaders he wants a quick resolution to a dispute that has kept casino operations from opening at Aqueduct and Yonkers racetracks.

In a meeting with legislative leaders, the governor suggested the issue should be resolved possibly before the state's fiscal year begins April 1. Officials estimate the state is losing $1 billion a year because video lottery terminals have not yet started at the two tracks.

"It's costing us," Pataki told the legislators in a conference room outside his Capitol office.

The governor's 2005 budget plan does not envision the VLT operations at the two tracks beginning until sometime next year. That would be too late for any money to be shared by the tracks with the state to help it in its upcoming fiscal year when the state is facing a $4 billion deficit. Pataki said he wants to get the VLT issue "off the table" and resolved sooner so that possibly some of the money can start streaming in this year.

Racing industry executives have been complaining for months that the state seemed uninterested in getting the two track VLT operations open. The state approved VLTs at most racetracks in 2001, and only four tracks have since opened racinos.

A state appeals court last year struck down a key provision of the VLT law that permits the state to share some of the VLT revenues with the racing industry in the form of money for purses and breeding funds. Various bills have been introduced in Albany to correct the court's concern, but the sides have been stalled for months.

The racing industry has been dissatisfied with the level of funding it gets to operate the gambling facilities. The New York Racing Association, meanwhile, has wanted the state to enact a provision to guarantee that its VLT partner, MGM Mirage, would still be running the VLT program at Aqueduct even if NYRA loses its franchise to operate three racetracks in the state. The state is making plans to put the NYRA franchise, which expires at the end of 2007, up for bid; MGM Mirage has been concerned it would not get back the more than $100 million it plans to invest at Aqueduct on VLTs if another company was awarded Aqueduct and the other NYRA tracks.

Showing a sense of urgency not seen before on the VLT issue, Pataki called for a meeting of staffers from his office and the Legislature for later in the day.

"I think we can reconcile those a half hour," Senate Majority Leader Joseph Bruno said of the VLT legislation debate.

"We've got to get it up and running,'' he added of the Aqueduct and Yonkers tracks' VLT operations. He said the state has lost $2 billion in revenues because of two years of delay.

The latest version of a VLT fix was introduced in the Senate Feb. 15. The measure would sharply raise the amount of money going to the racing industry. Under current law, the industry gets 29% of VLT revenues. The new bill, introduced by Sen. William Larkin, chairman of the Senate racing committee, would raise the industry share to 32% for the first $50 million in revenues, 29% for the next $100 million and 26% thereafter.

Additionally, tracks would get 8% on the first $50 million in VLT revenues to pay for marketing, and 5% of revenue beyond $50 million. The measure would leave it up to racetracks to cut deals with horsemen as part of contracts to determine how much of tracks' VLT revenues would then go to purses. The measure is silent on NYRA's MGM situation.