12/11/2003 1:00AM

NYRA to proceed with plan for slots


NEW YORK - The New York Racing Association will move forward with plans to install video lottery terminals, or slot machines, at Aqueduct, officials said Thursday after NYRA reached a deferred prosecution deal with the U.S. attorney's office.

"We're going to get that casino open," NYRA chairman Barry Schwartz said.

It is estimated that slot machines at Aqueduct could generate in excess of $400 million per year in revenue.

Although NYRA was indicted on charges of tax fraud, it will not face prosecution provided it adheres to a series of guidelines over the next 18 months. That decision will enable NYRA to retain its franchise to operate Aqueduct, Belmont, and Saratoga. Moreover, the agreement apparently allows NYRA's partner, MGM Mirage, to rejoin the slots project.

In August, when news surfaced that NYRA was facing indictment, MGM had to put its involvement on hold, and construction of a slots room at Aqueduct was halted. On Thursday, J. Terrence Lanni, chairman and CEO of MGM Mirage, said his company was prepared to move forward.

"We are very pleased that the U.S. attorney investigation of NYRA has been resolved and that NYRA is now able to proceed with operations at Aqueduct," Lanni said. "We have great respect for and confidence in Barry Schwartz and his team, and we look forward to working closely with NYRA on this exciting project."

Lanni's statement indicates the company has received assurances from regulators in Nevada or its legal department that the deferred prosecution will not present a problem regarding MGM's gambling licenses in Nevada, New Jersey, and Mississippi.

Nevertheless, officials in New Jersey said they were uncertain what impact the deferred prosecution may have on MGM's license in the state.

Earlier this year, the New York State Assembly passed a law that would extend NYRA's franchise from 2007 to 2013 if it has slot machines operating by March 1, 2004. Schwartz said NYRA would seek an extension of that deadline.

Schwartz said he hopes to have the slots operating by late fall or early winter of 2004. "We have to deal with environmental codes to get permits to start up again, and that could take five to eight weeks," Schwartz said.

- additional reporting by Matt Hegarty