06/19/2013 1:43PM

New York deal would extend slot machines to offtrack betting

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A deal reached between New York state legislators and Gov. Andrew Cuomo late Tuesday night would give two Long Island offtrack betting companies the right to operate slot machines and cap the amount of money from gambling that is directed to purses at New York’s three biggest tracks.

The deal, which is expected to be voted on by Friday, would not go into effect unless New York voters also approve a constitutional referendum in November. Under the deal, the state would make four “destination resort” casino licenses available for upstate locations as well as authorize 1,000-machine gambling halls in both Nassau and Suffolk counties, to be operated by the financially challenged county-owned offtrack betting companies.

Five full-blown casinos, all owned and operated by Native American tribes, already exist in New York. In addition, there are nine casinos located at New York racetracks that can operate only video-lottery machines, a term for a type of slot machine that is tied into a central processing unit and administered by the state’s lottery.

Cuomo has insisted that New York needs to expand the number of casinos in order to compete with neighboring states. The four new casinos would pay 37 percent to 45 percent of their gross gambling revenue to the state as a tax, but would not be required to make any contributions to the racing industry.

Casinos at racetracks currently pay out approximately 60 percent of their gross gambling revenue in taxes and payments to the racing industry. A consortium of racetrack casinos have rallied around that discrepancy as saying that the deal sought by Cuomo is unfair because it will give new casinos two competitive advantages over the existing racinos: a lower tax rate and the ability to offer table games.

The bill would direct 2.75 percent of gross gambling revenue from the video-lottery parlors in Suffolk and Nassau counties to horsemen at the three tracks operated by the New York Racing Association, which is currently controlled by the state. Another 0.5 percent would be directed to breeders’ awards from the parlors.

The bill caps the amount of money that NYRA’s horsemen can receive from casino revenue at the amount distributed in total this year by a lucrative casino at Aqueduct racetrack operated by Genting, a Malaysian conglomerate. In 2012, horsemen received $44.5 million from the casino. The total is expected to be several million dollars higher this year based on robust business at the casino.

Rick Violette, president of the New York Thoroughbred Horsemen’s Association, said Wednesday afternoon that lobbyists for the horsemen are still delving through the details of the massive and complex bill. But he said the horsemen supported the establishment of the two Long Island casinos, though he expressed disappointment about the cap on purse payments.

“That was a nuance that had not been advertised,” Violette said.

Both Suffolk Regional Off-Track Betting Corporation and Nassau Off-Track Betting Corporation are struggling financially as handle migrates from brick-and-mortar locations to account-wagering sites. Suffolk filed for bankruptcy in 2012, following the lead of New York City Off-Track Betting Corporation, which closed its doors for good at the end of 2010.