New York Gov. George Pataki, favors five Vegas-style casinos.

New York Gov. George Pataki, favors five Vegas-style casinos.


VLT Legislation Introduced in New York

Legislation has been introduced in New York to sweeten the pot for racetracks operating video lottery terminals, and to encourage the New York Racing Association's VLT partner to begin construction of a new casino at Aqueduct.

But the legislation stalled as quickly as it was introduced, as some
horsemens' groups protested its deletion of a provision in state law to guarantee a certain percentage of VLT revenues be dedicated to purses and breeding funds. A state appeals court earlier this year rejected that revenue-sharing provision, and backers say the new legislation is an attempt to answer the court decision. They say tracks are willing to share VLT revenues with purses as a part of contracts with horsemens' groups.

The measures, promoted by racing interests, come as Gov. George Pataki said he favors permitting up to five Las Vegas-style casinos in the Catskills resort area, up from the three that are now authorized under state law. The casinos would be major competition for the state's racing industry, particularly the New York Racing Association since the casinos would be located within about 90 minutes of two of its New York tracks.

"I think five makes perfectly good sense,'' Pataki said.

The Catskills casino expansion idea was promoted by Pataki just one day before he announced Dec. 6 a settlement agreement with two tribes -- the Oneida Indian Tribe of Wisconsin and the Stockbridge-Munsee Community -- to resolve existing land claim lawsuits in return for the tribes' development of two casinos in the Catskills.

The proposal would need state legislative backing, and there was already growing opposition by some lawmakers and, in particularly, New York state-based tribes that say Pataki is illegally cutting deals with out-of-state tribes for lucrative casino deals.

The two pieces of VLT legislation are meant to help VLTs become operationalat Aqueduct, a business both NYRA and state government is counting on for bringing in revenues. NYRA's VLT partner, MGM Mirage, has refused to begin the operation unless it had assurances that it will still be the VLT operator even if NYRA loses its franchise after 2007 to operate Aqueduct and two other tracks in the state. The legislation states MGM would be the VLT operator whether NYRA or some other entity, such as Magna Entertainment, is awarded the next racing franchise.

One of the VLT measures was pushed by Jeffrey Gural, a Manhattan real estate developer and standardbred owner. He is also an owner of Tioga Park, a long-shuttered track near the Pennsylvania border that he wants to re-open next year with racing and a VLT casino. Gural is a significant donor to political causes at the Capitol.

Presently, 92% of VLT wagers are returned to bettors. The remaining 8% goes mostly to the state, with 29% going to the racing industry, with portions for tracks, purses and breeding funds. Under one bill, the industry share would rise to 32% on the first $50 million in VLT proceeds, 29% on the next $100 million and 26% after that.

Racing lobbyists at the Capitol, led by NYRA and Yonkers Raceway, were pressing lawmakers during a special, two-day session Dec. 6-7 to enact some version of the VLT measures to get the much-delayed facilities open. Presently, VLTs are running at four racetracks, including Finger Lakes. But lawmakers appeared to be in no rush to resolve the VLT matter until next year.