New York Legislature Overrides Pataki's VLT Veto

The gubernatorial veto of a new video lottery terminal plan in New York was overridden May 15 by the state legislature, seemingly putting an end to months of uncertainty over the legislation.

The VLT bill was vetoed May 14 by Gov. George Pataki as part of 119 vetoes involving the state budget. But lawmakers rushed into session just 12 hours after getting his veto package and overwhelmingly rejected his vetoes, including a number of racing industry provisions the legislature had approved.

Lawmakers expect their VLT plan will finally get racetracks to install the gambling devices. They are counting on $165 million in revenue-sharing from the devices for the state's budget this year.

The override action affected not only the VLT measure, but also separate plans to eliminate all restrictions on pari-mutuel takeout levels at tracks and lifting restrictions on out-of-state simulcasting at off-track betting parlors. The overrides also cover a new assessment on track handle to fund the work of a state regulatory panel that oversees the industry.

While the overrides would appear to end the dispute between the governor and legislature, Pataki again left open the possibility he might take the legislature to court over parts of the budget he deems unconstitutional.

Under the terms of the racetrack VLT deal, the split given to tracks and to the state's education pot would increase at the expense of the share for the state Lottery Division, which will run the program. Racetracks would see their share of the VLT pot grow from 12.5% under the existing VLT law to 20.25% in the first three years of the program, sources said.

The original VLT program was approved in October 2001 but never started by eligible racetracks because they said the revenue-sharing arrangement would cost them money. Under the 2001 VLT law, 60% of revenue went to to state education programs, 15% to the Lottery Division, and 25% to the racing industry, a portion of which goes to tracks, purses, and breed development.

Under the new law, the racing industry's overall share increases to 29% of the pot, while education would get 61% and lottery 10%.

The racing industry's overall share is broken down as follows during the first three years of the program: 20.25% for tracks, 7.5% for purses, and 1.25% for breed development. In years four and five, tracks would get 20%, purses 7.75%, and breed development 1.25%. In years six through 10, tracks would keep 17.5%, purses would get 10%, and breeding funds would increase to 1.5%.

The new law extends the VLT program for 10 years, instead of expiring in 2007 as the 2001 law mandated. Also, VLTs will be able to be operate for 16 consecutive hours a day, up from 12 hours under current law. And the New York Racing Association would see its franchise to operate its three New York tracks until 2013 if it can get the VLTs running by March 2004.