NYRA's Schwartz Blasts State for Delaying VLT Opening

The chairman of the New York Racing Association is blasting state officials for throwing up what he says is another roadblock to opening a racino at Aqueduct racetrack.

Barry Schwartz said the state, and NYRA, is losing money every day the racing corporation is kept from moving ahead with its plans for a $140 million video lottery terminal gambling hall at Aqueduct.

The state recently gave a key go-ahead for NYRA's VLT project with the approval of an environmental review process that examined the track's construction plans, according to state lottery commission officials.

But NYRA's plans to begin work at Aqueduct has been stalled as Gov. George Pataki and legislative leaders decide whether to grant NYRA's request for an extension to its franchise to operate Aqueduct, Belmont and Saratoga, which now expires at the end of 2007. NYRA wants a two- or three-year extension to permit its VLT partner, MGM Mirage of Las Vegas, to obtain financing for the VLT construction that would be re-paid before the new extension date expired. A lobbying push by Magna Entertainment is seen by insiders at the Capitol as helping to block, so far this year, NYRA's franchise extension bid.

But now Schwartz said new obstacles are being erected. "Some legislators have felt that the entire building plan in its final form has not been presented to Lottery,'' Schwartz said of the state agency that is overseeing the VLT program in New York. The agency must approve all aspects of racetrack VLT plans, including construction plans. Schwartz said NYRA has submitted the first two major phases of construction to the state for consideration.

"I tried to explain to people that this is not like making a $10 million renovation on a small racetrack. This is a $140 million renovation,'' Schwartz said. He insisted it is not uncommon for some plans to not yet be finalized before construction begins on such a major project.

"We're a victim of this, and so is education,'' he said of the state law that will dedicate a large share of racetrack VLT revenues to public schools in New York. "They're losing $400 million a year and it doesn't seem to bother the governor or anyone in the Legislature. It bothers me that NYRA is losing $40 million, but it doesn't bother them that they're losing $400 million. I guess it shouldn't bother me.''

NYRA has estimated its racino will bring the state at least $400 million in annual revenues.

The NYRA leader said MGM Mirage officials are still standing by NYRA in its VLT partnership deal. Questions, though, have been raised whether state law in Nevada, where MGM is based, will permit MGM to do business with NYRA; some lawyers have said Nevada law appears to bar gaming companies from doing business with indicted individuals or companies. NYRA was indicted last year by federal prosecutors and fined $3 million for its role in financial abuses at its tracks; prosecution was deferred if NYRA remains clean during an 18-month period in which its operations are being overseen by a court-appointed monitor.

Schwartz has been showing increasing signs of his frustration with a lack of movement on the VLT plan; the law allowing Aqueduct to operate VLTs was approved in 2001.

"We can't seem to get anyone in Albany to change the statute,'' Schwartz said of the franchise extension request. "I guess $400 million to $500 million a year isn't important to the governor.''

State Lottery officials did not return calls for comment. NYRA plans to install at least 4,500 VLTs at Aqueduct. Earlier this year, Schwartz said the racino could be operating by the end of the year; that now seems all but impossible.