New York Official: Tracks Won't Get Help on VLTs

The official who is running New York's new racetrack video lottery terminal program said tracks should not expect the state to help with additional funds to cover the costs for installing and operating the VLTs.

Margaret DeFrancisco, head of the state Lottery Division, said her agency has hired an independent auditor to go over business plans submitted by tracks for the operation of the VLTs. Most racetrack operators have complained they will make no money from VLTs because they are being expected to cover too much of the costs of the program, including capital and staffing expenses that will cost each track millions of dollars.

"I don't know where it would come from,'' DeFrancisco said of the VLT revenue racetracks say the state should let them keep. She said the legislation limits how much the agency can share with tracks. The agency keeps 15% of the revenue.

"So there's just so much that can be done,'' DeFrancisco said.

Tracks can keep up to 25% of the VLT revenue, but must spend part of that on purses and operating expenses. Leading track operators such as New York Racing Association chairman Barry Schwartz, say the lottery office is expecting tracks to cover too much of the costs. They say, for instance, that a provision in bill that permits VLTs on a three-year experimental basis will make it hard for tracks to borrow money to pay for infrastructure.

DeFrancisco said she shares the concerns of track operators who have complained about the three-year life of the VLT program. But she said state officials are still studying whether the claims of tracks losing money with VLTs is true or not.

In January, the tracks submitted business plans for their VLT operations; a review of those plans is expected within a couple weeks, DeFrancisco said. She said the review would not likely be made public for proprietary reasons.

The lottery director, in a session with reporters following a state Assembly racing committee appearance, said tracks are being treated no differently than other lottery vendors, such as convenience stores. She sought to downplay industry complaints.

DeFrancisco said the VLTs will be in operation near the end of the year. The state's 2002 proposed budget envisions the devices up and running in November.

The state will pay for the central computer to operate the VLTs; bids on that contract are due back March 13 by the four or so vendors interested in providing the service. A contract for leasing the VLT machines will be put out after the computer contract is awarded, the lottery chief said.