12/28/2001 12:00AM

Nothing new under racing sun

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NEW YORK - The racing industry was supposed to be downing a few extra glasses of champagne this New Year's Eve, with 2002 ushering in long-awaited enhancements in the sport's two biggest markets: slot machines at New York tracks and account wagering in California.

Instead, the industry will be swilling its usual cocktail of Pepto Bismol with a dash of bitters. Neither of these potentially lucrative developments will be anywhere near the starting gate when the calendar changes Wednesday, and their once-bright long-term prospects seem dimmer by the day.

In Gotham, the New York Racing Association has gone from predicting 25 percent purse increases from slot revenues to balking at installing the things at all. Eight years ago, mayoral candidate Rudy Giuliani got lots of ink for claiming (incorrectly) that New York City OTB was the first bookmaker in the history of the world to lose money. Now NYRA is in the position of making an even more improbable claim: It is perhaps the first gambling entity ever to claim it cannot figure out how to make a profit off a slot machine.

The legislation authorizing New York racetracks to operate video-lottery terminals was rushed through in the middle of the night when no one was paying attention, so it's not surprising that it's ambiguous and not to everyone's liking. The slots would be run by the state lottery but the tracks have to build the facilities, staff and operate them, and negotiate their revenue slice with the state.

NYRA wants to build a $60 million slots facility like the one at Woodbine but has no money to do so and claims it can't borrow since the slots law sunsets in three years and its own franchise could be gone a couple of years after that. The first argument seems flimsy, as virtually all New York racing and wagering legislation has sunset provisions, and the second seems sure to tie up the issue for months if not years by linking the slots to the eternally thorny NYRA franchise issue.

NYRA's heart may well be in the right place: It wants the slots only to help racing, and thinks the best way to do that is to create a first-class facility that would attract new customers to Aqueduct and give NYRA the opportunity to convert some of them into horseplayers. In the meantime, though, there will be no new revenue that could be pumping up purses, improving the facilities and allow for increased marketing to an eroding fan base.

In California, account wagering will not begin Jan. 1 as originally planned, and nothing suggests that it won't be a mess whenever it does. Santa Anita runs through April and it is owned by Magna Entertainment, which is building its own account-wagering system. Hollywood Park, which opens after that, is owned by Churchill Downs and aligned with the Television Games Network. No agreement has been reached between the two entities to handle wagers or broadcast each other's races, raising the ugly likelihood that bettors would have to maintain different accounts with different entities at different times of the year. Nor are there any arrangements to bring the races into a majority of the state's homes via basic cable, as there are in New York.

Some at Magna already are privately crying foul, suggesting deliberate delays in the regulatory process that could drag things out until Santa Anita is closed and give Hollywood/Churchill/TVG first crack at the market. Even if this were true, it does not address the fact that Magna owns the two major northern California tracks, which comprise a year-round circuit. This whole thing is not going to work without cooperation between Magna and Churchill, which is no sure thing.

In the meantime, the market for early users of any new system is surely dwindling. Anyone already inclined to bet the races from home in California has probably figured out a way to do so with out-of-state or offshore providers, some of whom can provide players with rebates and other incentives that the tracks never will.

So while California regulators and industry stakeholders worry and parry, the customers drift away. Three time zones away, acres of Aqueduct sit empty while slots players board buses to Connecticut and New Jersey. Happy New Year, and pass the Pepto.