New York Tracks Prepare to Fight VLT Expansion

Track operators in New York are gearing up for a major lobbying battle against an effort to spread video lottery terminals beyond the state's horse racing industry.

Gov. George Pataki, in his plan for fiscal year 2004, was said to be planning an expansion of VLTs into off-track betting parlors or other franchises such as hotels. The administration, which supports the plan, is desperate for new ways to raise cash to help cope with an expected $5.1-billion deficit.

Pataki was scheduled to give the address Jan. 20. He previously pledged not to raise taxes.

New York Racing Association chairman Barry Schwartz couldn't be reached for comment, but officials with other racetracks privately said the Pataki plan would undercut their VLT plans. The state's first racino--Saratoga Raceway--is set to open at the end of January, and other tracks are either in the construction or planning stages. Track lobbyists are worried the Pataki administration's plans would erode revenue they are expecting from VLT operations.

The governor last year floated an idea to permit VLTs for New York City Off-Track Betting Corp., but the plan quickly died in the legislature under pressure from other OTB corporations as well as racetracks. But a number of hotel casino operators have quietly expressed interest in obtaining franchises to run VLTs, and OTB parlors upstate and on Long Island have pressed to get the devices in their teletheaters.

The Pataki administration, if it goes ahead with the VLT expansion, is expected to try to sell the idea as either a revenue-raiser for the state or as a way to help cash-strapped counties get more money.

Sources in the Pataki administration acknowledged some sort of VLT expansion is almost assured to be in the budget plan. But a lobbyist said a "war" was under way among Pataki aides in the days leading up to the budget release over which facilities should have VLTs.