State May Loosen Reins on Racinos

12:39 AM, Apr 11, 2005   |    comments
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Horse racing tracks are in the stretch run of a dispute with state leaders over their cut of revenue from video lottery terminals — an issue crucial to the future of racing in New York and in the area. The state Legislature approved a plan this month to give tracks a bigger share of the money, a decision hailed by racing officials. Local tracks, which would receive an increase of about 3 percent, have argued that they aren't making enough to remain viable and compete with Las Vegas-style casinos in New York, Canada and Connecticut. "The whole pitch is we can't do a good job with the money they are giving us," said Martin Basinait, president of Western Regional Off-Track Betting, which owns Batavia Downs. Gov. George Pataki has until Tuesday to approve or veto the state budget, which includes the VLT legislation. On Friday, the sides appeared to have cleared the last hurdle holding up a VLT deal. The deal had been in limbo because the sides couldn't reach a compromise over how to pay horsemen and breeders their share of the revenue. The state's highest court, the Court of Appeals, ruled in July that the current arrangement of giving a portion of the VLT revenue directly to horsemen and breeders was unconstitutional. The court said the revenue must go either to the vendor — in this case the tracks — or to the state to fund education. To comply with the ruling, horse racing officials and lawmakers appeared set to draft new legislation to create a pool of money for horsemen and breeders that would be appropriated each year by the Legislature. Local breeders had wanted their share to come directly from the tracks. Dennis Brida, executive director of New York Thoroughbred Breeders, said the agreement should satisfy the court order. "We feel it's just as good," he said. Tracks, horsemen, breeders and state leaders have been at odds since 2001 over how the revenue pie from the slot machine-like terminals should be divided. Racing officials and industry experts said New York is keeping too much, leaving little to improve facilities and offer incentives comparable to those offered by full-scale casinos. The legislation, if approved by Pataki, would bump up the tracks' share and create a fund to better market the racinos, as they're called. Under current state law, 92 percent of the money put into the VLTs goes back to the players as winnings. The remaining 8 percent is divvied up several ways: 61 percent goes to the state for education; 10 percent goes to the state lottery division; 20.24 percent goes to the tracks; 7.51 percent to the horsemen; and 1.25 percent to the breeding programs. While the tracks still won't be getting as much as tracks in other states, lawmakers say the change is a good step. "You have to promote this," said Assemblyman James Gary Pretlow, D-Mount Vernon, Westchester County, head of the Assembly's Racing and Wagering Committee. The state would "get a piece of a larger pie" if the tracks are successful, he said. In October 2001, the Legislature approved the state's largest expansion of gambling, including new casinos and VLTs at most New York racetracks. Only four of the eight tracks authorized to have VLTs have opened the gambling parlors, partly because of the revenue-cut issue. Locally, Buffalo Raceway is operating its racino and Batavia Downs is scheduled to open in mid-May. Batavia Downs was expected to open its VLT parlor this month, but it has postponed the opening because the machines have yet to be installed, Basinait said.

Gannett Democrat & Chronicle

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