09/16/2002 11:00PM

Northeast states consider slots

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NEW YORK - Following successful examples in West Virginia and Delaware, states in the Northeast and mid-Atlantic regions are increasing their interest in gambling machines at racetracks.

New York passed a controversial bill last year legalizing video-lottery terminals at some tracks. Pennsylvania's two gubernatorial candidates are supporting slots at tracks. One of Maryland's two gubernatorial candidates is an ardent slots supporter, and on Thursday New Jersey legislators will discuss a bill to legalize slots at tracks.

Support for slots is based on the premise that the machines can help the horse racing industry while simultaneously providing money for state projects during times of fiscal hardship.

"When an opportunity presents itself, you'd like to to be in a position where you can take advantage of it," said Hal Handel, the president of Philadelphia Park in Pennsylvania, where a recent poll showed that 63 percent of voters approve of slots at tracks. In Maryland, an August poll showed that 58 percent support slots.

Track officials are all making the same argument: Tax dollars are flowing across state borders to Delaware and West Virginia and to native American casinos in upstate New York and in Connecticut. Why not keep those dollars at home?

"We have to do something soon, or there won't be any horse industry in New Jersey anymore," said Barbara DeMarco Reiche, a lobbyist for the New Jersey Thoroughbred Horsemen's Association. "You just can't compete."

In New York, legislators cited the cost of the Sept. 11 attacks, a burgeoning fiscal crisis, and interstate gambling competition as reasons for passing the law to legalize video-lottery terminals. But since the law's passage, tracks have battled the state lottery corporation over details of the plan, calling their splits too small to turn a profit, while public advocacy groups have filed a lawsuit challenging the constitutionality of the legislation.

Even if the law is not struck down, New York racing officials have warned trainers that the payoff from slots may be well below expectations. Barry Schwartz, the chairman of the New York Racing Association, said recently that NYRA is considering a plan to find another company to run the slots operation. "We just don't have the expertise on staff," said Schwartz.

The company that NYRA selects, Schwartz said, would help it get financing to complete renovations to house the gambling machines. The tradeoff: even less money goes to the track and horsemen, Schwartz said.

In Maryland, Republican gubernatorial candidate Robert J. Ehrlich, has publicly stated his support for track slots. The Democratic candidate, Kathleen Kennedy Townsend, has said that slots at tracks would open the door to other forms of gambling in the state, which she opposes.

In New Jersey, any slot-machine gambling bill would have to be passed by consecutive legislatures or a two-thirds majority of both houses, and then by public referendum, DeMarco Reiche said. The bill to be discussed on Thursday "only says that you can have slot machines at racetracks," DeMarco Reiche said. "Nowhere does it say how it would be done, what kind of machines would be allowed, or who would benefit. That all remains to be worked out. This isn't a quick process."