NYC VLT Casino Embroiled in More Delays.

However, this time it’s the Lottery Division that seems to be the problem.

At risk is a new $180 million casino to build by MGM-MIRAGE at the Aqueduct racetrack in Queens and hundreds of millions in tax revenues. Additionally, the state is looking to get its cut of revenue, which is estimated to be $300 million during the first full year of operation and up to $600 million in revenue once all 5,000 machines are installed.

According to New York State Comptroller Alan Hevesi an approval for the installation of Video Lottery Terminals (VLTs) has been held up for more than four months. VLTs are similar in appearance to slot machines, but rather than a win or loss being determined by a random number generator within the machine itself, a signal is sent to the lottery offices in Albany where the result is selected.

Hevesi said the delay is cutting into the taxes the state should be earning and NYRA is potentially being forced into bankruptcy because of this needless delay, which he believes is due to more than the traditional nature of slow moving bureaucratic organization.

"It is not in the best interests of the state's taxpayers or the future of Thoroughbred racing in New York, or the state's finances, to create the appearance that the state is deliberately forcing the current franchisee to fail," said Hevesi. He also hinted the reason for the delay is over the potential future of NYRA itself rather than the issue of anything related to casino gaming. Currently, NYRA oversees Aqueduct as well as Belmont Park (also in Queens) and upstate’s Saratoga track.

The franchise for operating these tracks is up at the end of next year. There are three other groups vying to operate the racetracks

In a letter written by Hevesi, he wrote: "Is there really an interest in forcing NYRA into bankruptcy? Is it in the interest of New York state to have this critically important asset (and industry) undervalued? Is it actually someone's intention to change the dynamic of what is purported to be an open and fair competitive process to select the next franchisee?"

The facility was due to be open by October 2007 and budget assumptions for New York State have been made based on the facility opening. "Delay in establishing this facility creates a substantial risk to the state's financial plan, potentially exacerbating the out-year gaps to be faced by a new executive, which my office already estimates could exceed $13 billion," Hevesi wrote.

NYRA has warned it will be out of money if it does not get $19 million in loans immediately, and the only way it will be able to repay that sum plus an additional $11 million owed is via casino revenue. 

"While the state has anticipated revenues from the VLTs at Aqueduct providing financing to NYRA to move ahead with development of VLTs at Aqueduct and stated its commitment to ensure timely development of VLTs at Aqueduct, it continues its failure to approve the NYRA/MGM agreement. Absent approval of the agreement, the development of a VLT facility at Aqueduct and its promised revenue for the state's general fund and for the repayment of loans and deficiency appropriations will not occur and NYRA will face bankruptcy."



Recently, NYRA accused Governor George Pataki for putting the kibosh on a speedy deal approval. "The governor is the one stopping this," said NYRA chairman Steven Duncker.

In response, Pataki's office said NYRA's legal and financial troubles are the reason for the delays and because of this the deal needs extra scrutiny.

"NYRA is convinced that the Governor's office has directed the Division of the Lottery to either deny or delay its application for video lottery terminals at Aqueduct," said Bennett Liebman, coordinator of the Racing & Wagering Law Program at Albany Law School to the AP. "To thwart that, NYRA has gone to all its media supporters to try to rally support for VLTs at Aqueduct. Part of the NYRA effort has involved getting the comptroller to weigh in on this issue. In a more perfect world, the Lottery Division would be making its decision in a timely manner on the record, without any involvement from the Comptroller or the Governor's office."

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