05/02/2005 11:00PM

Court approves slots at track


The New York Court of Appeals upheld the constitutionality of video lottery terminals at racetracks in a ruling released Tuesday. The court also ruled that revenue from the machines could directly benefit horsemen, overturning an opinion issued last year.

The decision by New York's highest court will likely remove any legal hurdles to the widespread establishment of slot machines at racetracks, although the issues addressed by the ruling were already, in part, incorporated into legislation passed earlier this year by the New York legislature and signed by Gov. George Pataki.

In its ruling, the Court of Appeals said that video lottery terminals already in place at four racetracks in New York did not violate the state constitution, which limits gambling to parimutuel wagering and lotteries. The court said that the machines, which resemble slot machines, fit within the definition of a lottery because the devices are linked to each other and to a central computer run by the state lottery corporation.

"It is of no constitutional significance that the tickets are electronic instead of paper," wrote the chief justice of the court, Judge Carmen Beauchamp Ciparick, in her majority opinion. "The particular methods of conducting the lottery are subject to change with time. The language of the Constitution is not so rigid as to prevent this update and modernization."

The court also overturned a decision by the New York Supreme Court in 2004 that revenue from the machines could not directly benefit horsemen. That part of the ruling addressed an earlier version of the law that was amended by the legislation passed earlier this year, in which no set percentages of the revenues were granted to purses and breeders' funds.

Judge Ciparick wrote that the court decided to address the issue because the legislation passed this year "is prospective only," and because payments into horsemen's funds prior to the court ruling in late 2004 have been set aside by the tracks already operating the machines while the appeal ran its course. Tuesday's ruling said the legislature was within its bounds to set terms for how racetracks used the revenue from the machines, citing the regulatory power of the state.

"The state, which heavily regulates the racing industry, has made a policy determination that the tracks simply cannot retain as profit their entire fee after payment of costs, but must reinvest a percentage back in the industry itself," Ciparick wrote. "Placing such restrictions on the use of the tracks' earned profits is a common practice in the racing industry."