NY Tracks to Offer Casino Expansion Plan
by Tom Precious
Date Posted: 9/6/2011 9:09:44 AM
Last Updated: 9/7/2011 9:12:02 AM

Aqueduct has plans for future VLTs
Photo: Coglianese Photos

Racetracks across New York Sept. 7 will unveil a plan to amend the state constitution to permit them to offer a complete array of casino gambling as part of a proposal they say will raise money for the state government and the industry.

With state officials, including Gov. Andrew Cuomo, signaling interest in possibly expanding casino options in the state, the racetracks that already have video lottery terminals say any future expansion should be limited to their sites as a way to block added casino competition from within New York.

The tracks–Thoroughbred and harness tracks, including the operators of the future VLT casino at Aqueduct–say their plan would be the quickest and most politically viable option to get new casino revenue generated in the state. The plan will be unveiled during a Senate Racing Committee meeting.

James Featherstonhaugh, head of the New York Gaming Association, which represents tracks and others pushing the idea, said the plan differs sharply from other ideas to place new casinos in certain geographic clusters or expand the number of Indian-owned facilities. He called those proposals “a decade behind the times.”

To become reality, the industry-backed plan would require the approval of two consecutive sessions of the state legislature and support in a statewide referendum. The earliest a statewide vote could occur is November 2013.

Backers say the plan would stand a better chance with voters because it would feature an expansion of existing casinos instead of new, Las Vegas-style casinos in new areas of the state. Nine tracks now are permitted to have VLT casinos under a 2001 law.

“We’re simply asking you let people play different games at the gaming facilities that already exist,” Featherstonhaugh said.

The plan envisions a complete assortment of table games as well as new entertainment and hotel development. In all, the group claims tracks will spend more than $1 billion on development, and the state will take in more than $150 million a year in new revenue-sharing payments.

Gambling advocates stepped up a push for casino expansion in New York in the 1990s. New York officials, concerned about voter disenchantment, pushed ahead instead with Indian-owned casinos, racetrack VLT operations, and new lottery games. In nearby states and Canadian provinces, full-blown casinos have spread.

Track representatives say an economic plan for their casino expansion being developed by Union Gaming Group will be complete in October, but that they expect introduction of table games would, based on the experience in bordering Pennsylvania, boost the play in VLT games by 15%.

The proposal comes as the heads of the Senate and Assembly racing and wagering committees have been pressing for a vote early next year on a constitutional amendment to expand casino gambling. Also, Cuomo, who took office in January, said his administration is studying new options for casino gambling in New York in recognition of the nearby casino competition and gambling already permitted in New York.

Assembly Speaker Sheldon Silver, a Manhattan Democrat, has raised red flags about permitting a full-blown casino within the boundaries of New York City. That would pose problems for Genting Group, the Malaysian-based gambling company that is set in October to open the long-stalled VLT casino at Aqueduct, which is located in the borough of Queens.

The plan envisions sharing 15% of the drop of table game revenue. The state now gets about 50%–the amount varies, in part, by size of facility–of VLT revenue, with another 10% going to the state lottery agency for its administration of the games. Operators get about 20%, and the industry, in the form of purses and breeding programs, shares much of the remaining splits.

Featherstonhaugh, a lobbyist at the state Capitol and financial partner in the harness track in Saratoga Springs, which has a flourishing VLT operation, said the plan will provide more money to the state and the industry than other casino options being considered. Moreover, he said the plan will help cut the flow of what he said is about $5 billion in gambling annually by New Yorkers in out-of-state facilities.

Proponents say they expect opposition from anti-gambling groups, which argue New York’s gambling offerings have been too explosive over the past decade, as well as Native American tribes looking to expand in areas like the Catskills resort region, and casino operators in Atlantic City, N.J.; Connecticut; and Pennsylvania.

“But I think we will have broad support from the racing industry, agriculture, horsemen’s groups and breeders, unions. I believe this is an idea whose time has come,” Featherstonhaugh said.



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