NassauLONG ISLAND
Nassau County gets no revenue guarantees in VLT deal
Brunilda Garcia of the Bronx plays the slot machines at the Resorts World Casino as it officially opened its doors at Aqueduct Racetrack on Oct. 28, 2011, in Jamaica, Queens. Photo Credit: AP / Kathy Kmonicek
HIGHLIGHTS
- Amounts are not set
- Nassau OTB chief calls it the ‘best deal possible’
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A state legislative deal transferring Nassau County’s authority to install 1,000 video slot machines to Aqueduct Racetrack in Queens does not guarantee a specific amount of money that would flow to the county, officials said Thursday.
Under the agreement, Genting New York LLC, a Malaysia-based firm that operates Resorts World casino at Aqueduct, will make monthly payments to Nassau Regional Off-Track Betting Corp.
In exchange, Resorts World will get Nassau’s authority to add 1,000 video lottery terminals in addition to the 5,433 it already has.
OTB had planned to build a VLT casino at state-run Belmont Park but faced community opposition.
OTB president Joseph Cairo said the agency would use an as-yet-undetermined percentage of the money to pay down $12 million in debt, including its operating deficit. OTB ended 2015 with an operating deficit of more than $7 million, according to county officials.
Cairo said the remaining revenue from Aqueduct would go to Nassau, and that the county would receive a steady source of revenue.
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“It’s the best deal possible,” Cairo said.
The agreement guarantees that OTB will transfer revenue to Nassau County, but does not specify any amounts.
Adam Barsky, the new chairman of the Nassau Interim Finance Authority, a state oversight board that controls the county’s finances, said it is “bad public policy” for the Genting payments to go directly to OTB. Barsky noted that if OTB went bankrupt, the payments could be at risk.
“This money was intended to help the county, which is in distress, and should not be used to bail out a money-losing gambling operation at the taxpayers’ expense,” Barsky said.
The agreement deal calls for Genting to pay OTB $9 million in 2016 — $5 million in May and $4 million before year’s end, Cairo said.
In April 2017, Genting would begin making monthly $750,000 payments to OTB. In April 2018 — or sooner if Genting has the additional 1,000 VLTs in place — the company would send OTB monthly payments of just over $2 million, or $25 million for the year, Cairo said.
If Genting experiences delays in siting the VLTs, the $25 million payment would be deferred until no later than April 2019. In that situation, Nassau OTB would be guaranteed a $9 million payment.
Future payments to OTB would be $25 million per year, plus an amount adjusted for inflation, and would continue as long as the Aqueduct VLTs are operating, Cairo said.
Nassau County Legis. Carrié Solages (D-Elmont), who had opposed the Belmont casino plan because of concerns about increased traffic and crime, said the revenues from the Aqueduct VLTs should go entirely to the county.
“Why should the taxpayer be responsible for OTB’s debt?” Solages asked. “That seems unfair.”
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Pat Nicolosi, president of the Elmont East End Civic Association, who supported the Belmont plan, expressed disappointment. He called the revenue payments to OTB “chump change,” and said the county would lose casino jobs to Queens.
“Overall, the longterm VLT plan appears to provide taxpayers with significant recurring revenue, however, absent OTB’s spending plan the immediate benefit is unknown,” Nassau County Executive Edward Mangano said in a statement.
The deal requires OTB to submit a spending plan in the coming weeks to the state Gaming Commission, including a detailed accounting of how it will pay off its debt. The commission must approve the legislative deal.
Cairo said the agreement is not a “panacea” for the OTB’s finances. “We still need to cut back,” he said, adding that the agency is selling its Farmingdale branch building.
Gaming Commission spokesman Lee Park declined to comment.
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