10/26/2001 12:00AM

In emergency, N.Y. dials s-l-o-t-s


NEW YORK - In a week when the Breeders' Cup at Belmont was 1-100 to be the most important thing to happen in New York racing, along came politics to post an upset. The sudden and unexpected passage of an expanded-gambling bill by state legislators Thursday will bring hundreds of slot machines to Aqueduct next year.

They're actually called VLT's, which sounds like a meatless sandwich but stands for video lottery terminal, which looks, walks, and quacks just like a slot machine. That evasive verbiage is typical of the surreal nature of this legislation, which was making its annual march to oblivion until the terrorist attacks of Sept. 11.

In every previous year, legislators balked at authorizing casinos or racetrack slots for a variety of typical political reasons: moralism over expanded gambling, regional fights over where to put the new devices, tensions between the tracks and the OTB's. Now, though, with the city and state facing massive revenue deficits stemming from the Sept. 11 attacks, reluctant legislators were able to cite a state of emergency to justify voting "yes" while holding their noses.

Whether or not this is an ideal way to set public policy is now academic. It's a done deal and the good news is that the legislation could not have been much more favorable for Thoroughbred racing in the state if the industry had been its author. There will be no casinos in competitive range of Aqueduct, Belmont, or Saratoga, and Aqueduct will be the only place in New York City where you can play the slots.

What that should add up to is a nice pile of unexpected and free money for both the NYRA tracks and for Finger Lakes, which will also get VLT's.

Analysts are only beginning to sharpen their pencils to quantify this bounty. The tracks must still negotiate their cuts with the state lottery commission, and predicting the popularity of the VLT's is a highly inexact science. Early guesses are that the tracks could end up with anywhere from $20 million to $80 million a year in found revenue, with 35 percent of that going straight to purses in year one and 45 percent in succeeding years. The state Breeding and Development Fund also gets 5 percent of the tracks' piece, which could send statebred supplements soaring.

At the NYRA tracks, horsemen's groups already are estimating a 20 percent increase to purses, while Finger Lakes officials are even giddier, talking about perhaps doubling their overnight purse structure. These kinds of increases should lead to markedly fuller fields and could give the state's breeding program significant new life.

There are dozens of questions about how this will all work. Will Aqueduct be transformed into a 24-hour gambling palace by the Belt Parkway? Or will the slots be hidden somewhere in the basement with the handle-pullers and horseplayers blissfully unaware of each other? Is there anything NYRA can do to convert the slotplayers into horseplayers? Will handicappers get any direct benefit in the form of expanded player rewards or a further takeout reduction?

There are no answers yet, because no one expected this would actually happen.

Whither OTB?

The other apparently dead legislative issue that might have been resuscitated under the same logic as the expanded-gambling bill is the disposition of New York City OTB. A disingenuous "sale" to Magna Entertainment was announced this summer, but it faced insurmountable opposition from the City Council, upstate legislators, and municipal unions.

On the other hand, until six weeks ago, it could be fairly argued that the city did not need one-time sales proceeds at the expense of an ongoing revenue stream. That has clearly changed.

Not even newly knighted Mayor Rudolph Giuliani, however, appears capable of getting this deal done in his last two months in office. And that's a good thing. Control of New York City OTB is so fundamental to the future structure and operation of racing in the state that it needs careful and tempered consideration, not a quickie transaction that would leave the industry in chaos. Magna, which was misled by a Giuliani administration that had no authority to sell OTB on its own, deserves a chance to make its case but in the light of day and the context of what is best for the public and the industry.