Updated on 09/15/2011 1:18PM

New York tracks set to get slots


NEW YORK - Five racetracks, including Aqueduct and Finger Lakes, will be allowed to operate video-lottery machines for the next three years under a bill expected to pass the New York state legislature Wednesday night.

The legislation, which is being strongly pushed by racing interests, would bring the largest expansion of gambling in New York since the lottery was legalized in 1966. Officials estimate that the machines could pump more than $50 million into the New York Racing Association's budget each year and drive purses to a record level for North American racetracks.

The measure would also allow for six new Native American casinos in upstate New York and enable New York State to participate in the multistate lottery game Powerball. Officials estimated that the expansion will provide $1 billion in revenue for the state per year by 2004.

Late on Wednesday, the measure was being fast-tracked through the legislature, lobbyists said, in part because supporters feared that harsh criticism from New York Mayor Rudolph Giuliani and others on Wednesday could foil the bill. Giuliani criticized the measure for potentially drawing money away from the New York City economy to locations upstate.

"To be honest, they're afraid this thing is going to unravel," said one lobbyist. "They want to ram this through tonight before anyone goes home and gets here fresh in the morning hoping to debate."

Legislators are being urged to pass the bill under intense pressure to raise additional tax revenues for New York State, which is reeling from a dramatic economic slowdown and the financial burden created by the clean-up effort from the terrorist attacks on New York city.

The video-lottery machines, which are similar to slot machines, will be operated by the New York State Lottery, which is expected to retain at least 75 percent of the revenues. Racetracks will receive at least 12 percent of the revenue and up to 25 percent, subject to negotiations between the tracks and the state lottery. The VLT portion of the bill would expire at the end of 2004.

In the first year, according to the measure, horsemen will receive

35 percent of the track's share, and the New York Thoroughbred Breeding Development Fund will receive 5 percent. In the second and third years, horsemen will receive 45 percent while breeders will continue to receive 5 percent.

Under those percentages, with 2,500 machines, Aqueduct could be expected to generate $225 million in net revenue from the machines a year, according to estimates for the net win of the average machine compiled by lotteryinsider.com, a trade group. Of that total, Aqueduct could receive as much as $56 million a year, providing a $75,000 boost to purses each day.

"I've never been in this business, so I really don't know what we can expect," said Barry Schwartz, the chairman of NYRA, which owns and operates Aqueduct, Belmont, and Saratoga, on Wednesday afternoon. "But I'll get to know it pretty quickly. We know this is going to be a tremendous infusion of purse money."

Richard Bomze, the president of the New York Thoroughbred Horsemen's Association, estimated that purses would increase 20 percent at NYRA tracks under the new measure.

"We're very pleased," Bomze said. "The state needs a lot more money, and now we're going to get our VLT's, which I've been fighting for for over a year now."

Aqueduct and other tracks will be able to take bets through the VLT's for 10 hours each day, from 10 a.m. to 10 p.m. on weekdays, and from noon to 12 a.m. on Saturday and Sunday.

Three harness tracks will also be given machines: Yonkers Raceway just north of New York City; Vernon Downs in upstate New York; and Monticello Raceway, which is located about 100 miles northwest of the city.

Under the provisions of the measure, local governments in Saratoga Springs, Batavia, and Buffalo could vote to allow video lottery terminals at racetracks, although the machines are expressly prohibited at Saratoga Race Course.

Although NYRA officials declined to push for the machines at Saratoga because of the town's objections, a request to have the machines at Belmont Park was rejected because of opposition from Nassau Country officials, according to Schwartz.