MGM, Trump Entities Are Finalists for New York VLT Contract

The New York Racing Association has narrowed the choice of companies to run its future VLT betting operation at Aqueduct to two major casino firms: MGM Mirage and Trump Hotels & Casino Resorts.

The companies are vying for what could be an extremely lucrative contract to operate a major new betting hall within the city limits of New York that NYRA officials revealed could house far more VLTs than first proposed. Las Vegas-based MGM Mirage owns or operates 15 casinos, while the Trump company, controlled by Manhattan real estate developer Donald Trump, is a major casino player in Atlantic City. Trump, who also runs casinos in Indiana and California, has pushed to block casinos from entering New York.

The narrowing to MGM and Trump has come after nearly a year of interviewing a host of top casino companies, sources said. NYRA Chairman Barry Schwartz declined to comment on the selection process.

But Schwartz said he is growing more confident that political disputes in Albany can be resolved so that racetracks across the state can begin offering video lottery terminals. The VLT program was authorized at the end of 2001, but tracks have balked at starting because they claim the split is too low to make any money. Several proposals are floating around Albany to fix the problem, though it is unclear when a deal could be reached.

If a deal comes together soon, Schwartz said VLTs could be turned on within the last three months of this year. That would be good news to the state of New York, which is awash in red ink; the state gets 60 percent of VLT revenues under current law.

Schwartz said the VLT operation at Aqueduct would be done in several stages that would ultimately end up in a posh betting and entertainment complex. In the first phase, Schwartz said by the end of the year up to 4,500 VLTs could be in place at Aqueduct if state officials agree on a new VLT revenue distribution program. That number is far in excess of the 2,500 machines that had been envisioned – and so far authorized by the state – for the racetrack. "They'd be more than glad to give us more,'' Schwartz said, noting the state's huge deficit.

"Clearly, that would be a tremendous starting point,'' he said of the initial plan that would bring the devices in before other additions such as an entertainment hall and retail space.

Schwartz said estimates for an Aqueduct VLT operation range greatly, but he said industry officials believe the track could draw between 12,000 and 20,000 bettors a day. He said the range on the VLT drop has been estimated at between $300 to $500 per machine per day.

"Three hundred dollars would be very profitable. Four hundred dollars would be enormous. Five hundred dollars would be amazing,'' he said.

Schwartz said he talked this week with Senate Majority Leader Joseph Bruno, a longtime ally of NYRA, about the VLT issue. "They realize it's in everybody's interest to get these up and running,'' he said of state officials. "And certainly Joe is very aware of what it means to the state.''