Budget Plan Would Put VLTs at New York OTBs

Video lottery terminals would be permitted at off-track betting facilities in New York under a plan being considered by state budget negotiators. The idea is being promoted to deal with another huge, multibillion-dollar budget looming over the next two years and a failure by racetracks to get VLTs up and running quickly enough to send revenue-sharing money to the state.

State officials were hoping to see millions of dollars from racetrack VLTs start trickling in this year, but only a couple of Standardbred tracks are planning to open their racinos in January 2004. The biggest facility, at the New York Racing Association-operated Aqueduct, is on hold because of NYRA's ongoing legal problems.

The look to VLTs at OTB parlors came after Gov. George Pataki last spring floated a plan to allow the devices at several OTB facilities in New York City. His administration, legislative and industry sources said, is now examining a plan to permit the devices at an unknown number of OTB facilities around the state.

The proposal is being given a better shot at success now because Pataki and legislative leaders already vowed not to raise taxes in the coming year, which is an election year. They've been left scrambling for more politically palatable ways to raise cash.

The plan will put increased pressure on racetracks, which risk losing more of their betting dollar to OTB parlors. OTB officials have said the devices could raise at least $2 billion that could go to state and county governments and school districts. That kind of money, even if the take is overestimated, may well be too much for some state officials to pass over this year.

Besides political and social opposition, though, the spread of VLTs is being considered in the state courts, and the OTB corporations could risk beginning an expensive venture that a pending lawsuit could end.

It is unclear where the VLTs could go at OTB parlors, because most of the OTB facilities are far too small for the space needed for the devices. That would require either expensive expansion, which in places like New York City is prohibitive because of lack of expansion space, or purchase of new buildings.

The governor's budget office was unavailable for comment. But one legislative proponent of the idea said that, as revenue-raising ideas go, permitting OTB parlors to have VLTs would be "a big, big one." Senator William Larkin, a Republican who chairs the Senate racing committee, said the idea is "worthy of consideration."

Donald Groth, president of Catskill Regional Off-Track Betting Corp., said the state has already "crossed the line" with VLTs when, in 2001, it legalized them for racetracks. Now, as in numerous times in the past 50 years, state officials are again considering ways to expand gambling to deal with deficits. He said the governor's budget office in recent weeks has reached out to some industry officials about the idea of VLTs at parlors.

Groth said the VLT plan, if enacted, would work best along border areas because it could draw in money from out-of-state residents instead of "extracting money from our own people." He said he "would certainly be enthusiastic" with the prospect of opening three such border sites with VLTs in locations in his OTB district near the Connecticut, New Jersey, and Pennsylvania borders.