Lawmakers, NYRA supporters worry about VLT revenue
Part of the money they count on now going to Nassau County, Long Island, Off Track Betting Corp.
By Rick Karlin
Published 11:53 pm, Tuesday, January 17, 2017
Albany
Shortly after the start of a special hearing about thoroughbred racing on Tuesday, state Sen. John Bonacic said the Cuomo administration had just let it be known that the 2017-18 budget plan would include a long-awaited re-privatization of the New York Racing Association, which operates the Saratoga and other thoroughbred tracks.
But instead of hailing that news, Bonacic and others said they were facing a new challenge — in which NYRA may lose millions of dollars in subsidies to the Nassau OTB operation on Long Island.
The problem stemmed from the current budget in which the governor reached a deal last spring with Long Island Senate Republicans to help bail out Nassau OTB.
In that arrangement, Resorts World, which operates a large video lottery terminal racino at the Aqueduct track in Queens, would allocate revenue from 1,000 VLTs, which are like electronic slot machines, to Nassau OTB.
Over the summer, NYRA supporters expressed worry about that deal since the new machines could dilute or proportionately lower the revenue from Resorts World's existing VLTs.
It was worse than expected, they said Tuesday. That's because Resorts World had, rather than buying more VLTs, simply reallocated earnings from 460 of their 5,540 existing VLTs to Nassau OTB at the expense of NYRA.
It wasn't immediately clear if Resorts World, operated by the Malaysian-based Genting gaming company, was going to do the same with another 540 VLTs to get to the 1,000 mark.
On Tuesday, Genting spokesman Michael Levoff said, "The designation of machines on behalf of Nassau OTB and the proposed expansion of Resorts World New York City are part of the same initiative to provide all parties, most importantly the state's education fund, with millions of dollars of incremental funding."
The reallocation is important because NYRA counts on the VLT money to subsidize purses, racing operations and capital improvements like Saratoga track renovations.
Supporters said this could cost NYRA $3.2 million annually. Horsemen who breed and train the thoroughbreds believe it will cost them $2 million as well.
Moreover, Resorts World has allocated money from the most profitable machines, which according to earlier reports bring in more than $800 per day, to Nassau OTB.
"This is the absolute opposite of what was supposed to happen," said Jeffrey Cannizzo, executive director of the NY Thoroughbred Breeders group which benefits from the subsidy.
Lawmakers said they would oppose the deal and try to prevent more machines being re-allocated to Long Island.
In addition to exposing rifts regarding the VLT subsidies that support horse racing and its attendant OTBs, the situation also amounts to an upstate-downstate funding struggle.
Many of NYRA's most vocal supporters are from the Saratoga Springs area while Nassau OTB is a Long Island organization.
"We will do everything in our power to prevent the government from taking money away from the racing industry," said Bonacic, a Middletown-area Republican.
The VLT flap on Tuesday overshadowed news that the governor's 2017-18 budget contained a proposal to bring NYRA back into private hands, which was promised several years ago.
Amid ongoing financial losses and a scandal over payouts, Cuomo in 2012 pushed through creation of a special government-appointed control board to operate NYRA for what was supposed to be two years. But the deadline for re-privatization kept being pushed back, extending the current state control to four years.
NYRA supporters, particularly in Saratoga, say they believe the ongoing state control has paralyzed the group, making it harder for them to lay out long-term plans as well as track improvements.
The Cuomo administration, though, has argued that NYRA has been brought back into profitability under control of the special board.
Bonacic and others said they welcomed news of re-privatization but cautioned they would have to see details before lending their approval.
"I need to read those before I can comment on them," Saratoga-area GOP Sen. Kathy Marchione said of language accompanying the proposal.
rkarlin@timesunion.com • 518-454-5758 • @RickKarlinTU
Rick Karlin
Times Union
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