Bill to Revamp New York Racing Passes Senate

The New York state Senate June 3 gave quick approval to a plan to overhaul the regulation of racing in the state, including a provision designed to get video lottery terminals installed this year at Aqueduct.

The bill denies a bid by the New York Racing Association to get its racetrack franchise, due to expire in 2007, extended until 2010, but paves the way for MGM Mirage, its VLT partner at Aqueduct, to begin the VLT program.

Approval of the measure in the Senate by a 50-9 vote came just days after the sweeping package was proposed last week by Gov. George Pataki. State officials say they need the revenues estimated by some at $1 billion -- from the 5,000 or so machines slated for Aqueduct to help pay for a hike in education aid. Senate Majority Leader Joseph Bruno said the state is losing millions of dollars each week VLTs are not operating at Aqueduct. He said MGM officials have assured him they can get the VLTs operational by the end of the year if the legislation passes quickly.

The legislation has not yet been introduced in the Assembly, though racing insiders expect the Democratic-run house to approve it.

The measure ensures that any deal MGM strikes with NYRA to run VLTs will continue even if NYRA loses its franchise after 2007. MGM has said it can't finance the $140 million VLT parlor unless its VLT management contract continued for several years after 2007.

The legislation significantly alters how racing in the state is regulated by collapsing the functions of several state agencies into a single State Gaming Commission, which would be run by a panel appointed solely by the governor.

Separately, an oversight panel would be created to monitor NYRA, which was indicted and fined $3 million last year for its role in widespread financial abuses at its tracks.

Bruno said the oversight panel will be to examine what to do about the franchise to operate Aqueduct, Belmont and Saratoga. "Nobody is closer to racing or NYRA than I am...I love horses. I love racing and I love to see revenue created for the people of this state through a sport such as racing, but it needs help,'' Bruno said. He said the panel should address not just whether to extend NYRA's franchise, but whether New York should end the not-for-profit status of racing at the three tracks by awarding the franchise to a for-profit entity or creating a partnership with NYRA. He did not elaborate, but Magna Entertainment is actively pressing to get a hold of the NYRA franchise.

Bruno lamented the lack of funds that the state gets from the financially ailing racing industry. "We are receiving pretzels,'' he said.

"We do not stand as the premier racing state...and we should,'' he added.

The new state Gaming Commission would have broad powers, including the ability to step in to take control of a faltering racetrack or racino. It would also include a team of State Police investigators to monitor everything from charitable gambling ventures and racetracks to Indian casinos. Agencies eliminated under the governor's plan include the Racing and Wagering Board and the Thoroughbred Capital Investment Fund. Breeding and development funds, now autonomous, would be folded into the state agriculture department.

Critics slammed the Senate Republicans for pushing the measure through so quickly. Democratic lawmakers said the bill includes a number of problems, including no set standards for competitive bidding by the new gaming commission and no set role for the state attorney general's office in the racing industry.

"The goal of this bill is that horse racing and gaming activity in this state will be of the highest integrity, credibility, and quality and that the best interests of the public, both gaming and non-gaming, will be served,'' said a Senate Republican memo in support of the measure.