Hit by relatively high revenue-sharing demands from the state and plans for even more gambling competition, New York's racetrack video gaming machine program has a murky future, Wall Street analysts and industry officials said."It will be a real crapshoot whether we succeed or not," said William Bissett, a vice president at Delaware North, which runs the video gaming machines at three racetracks in New York.The industry officials used a June 23 conference, sponsored by Ascend Media at the Oneida Indian Nation's Turning Stone casino in upstate New York, to pitch for a higher split for the racing industry--the state gets 71% of VGM revenue and the industry 29%--as a way to raise more money to create more upscale racinos that can compete with New York's expanding Las Vegas-style casino industry.Wall Street analysts said tracks would find it difficult to raise money at attractive rates to help create VGM parlors at their facilities because of the low revenue share they get from the machines. They pointed to several tracks that have yet to begin construction on their parlors, three years after the racino law was passed. And they note the racinos, unable to borrow as much as casinos, can't build the type of gambling facilities that can compete with casinos."It's a difficult market to invest in," said Jacques Cornet of CIBC World Markets.The analysts also sounded warnings for the Aqueduct and Yonkers Racetrack, where VGM plans have stalled for various reasons. When they open, the two New York City-area tracks will be, by far, the biggest operations in the state.But the analysts, including Marc Falcone, a managing director of Deutsche Bank Securities, said the state, reliant on a big draw at the tracks to help balance its budget, is likely to be disappointed in the results at Aqueduct and Yonkers. Competition from full-blown, destination-style casinos in Connecticut and Atlantic City, as well as the high New York tax rate, will dampen anticipated revenues at the two tracks, they warned.Cornet said he doubts whether MGM Mirage, the casino company that has partnered with the New York Racing Association on the Aqueduct project, even expects to make any real money on its investment. Rather, he believes MGM will try to use Aqueduct as a source to expand its customer base for its out-of-state casino operations.The state has permitted VGM parlors at eight New York tracks. Gov. George Pataki proposed another eight non-racing VGM facilities. That, combined with the high take from the state in racetrack VGM revenue, will force track operators to run on extremely tight margins."The VLTs are underperforming," said Eugene Christiansen, chairman of Christiansen Capital Advisors. With more competition planned and the high tax rate, "the racinos are getting the short end of the stick," he said.Christensen said Aqueduct would not be the overwhelming success some might believe. He said much of the $140 million planned for renovations would have to go to basic, structural type work."You're not getting Mohegan Sun or Casino Niagara," he said. "It will be a real barebones casino operation."Christiansen said getting bettors to Aqueduct and Yonkers, which he described as "not the garden spots of the metro area," would be no easy task for track officials.The numbers so far lag behind those in other states. The three tracks with VGMs--Finger Lakes Gaming and Racetrack, Saratoga Gaming and Raceway, and Buffalo Raceway--began operations at different times over the past six months. At Finger Lakes, the daily revenue per machine has been running $170. At Saratoga, it has been $160, and at Buffalo, it has been $110, Bissett said."Is it a good investment? Right now, I'd say it's tenuous," Bissett said.