Racinos tout results amid casino competition

5/19/17 – Democrat & Chronicle

ALBANY – The state’s nine racetracks with gambling operations are promoting how much they provide to the state in education dollars and jobs amid growing competition from casinos and a push by some of them to improve their tax rates.

The racetracks, which stretch from Queens to Buffalo, said they generated $3.3 billion in economic activity last year and provided $905 million that went to fund education in New York, the most since they started to open in 2004.

The racetracks all have video-lottery terminals, except one: Tioga Downs in the Southern Tier, which converted to a full-scale casino last December after getting a gambling license from the state.

“Every year, the contribution of our member facilities can be seen and felt across local communities,” said Michael Wilton, the association’s executive director.

New competition


The racinos, approved in 2001 after the 9/11 attacks to boost the state’s coffers and economy, have faced stiffer competition from two new upstate casinos that opened in February, as well as casinos run by the Seneca Nation in western New York and the Oneida Nation in central New York.

The Oneidas own the Turning Stone Casino and Resort and the Yellow Brick Road Casino closer to Syracuse. The Oneidas are also planning a third casino in the region after the del Lago casino in the Finger Lakes opened in February. Rivers Casino in Schenectady also opened in February.

The racinos, which are limited to electronic games run by the state Lottery and cannot have table games, have raised concerns about the competition. There are eight gambling halls between Batavia and Albany.

The Gaming Association report said the tracks provided $87 million in tax revenue to local governments last year and $221 million for the state’s standardbred and thoroughbred racing industry.

Vernon Downs and Batavia Downs are both lobbying the state Legislature this year to lower their tax rates, saying the competition is impacting their bottom lines.

The tracks pay a portion of their revenue to the state, and some of the money goes to the racing industry.

Better tax rates


Jeff Gural, who owns Vernon and Tioga, visited with state officials this week to push for a better deal, contending Vernon lost $782,000 in the past six months because of the expansion of casinos in the region.

Vernon delayed its open until May 5 because of the financial trouble.

“We resumed racing two weeks ago, and I have been in discussions with the powers that be in Albany with a plan that hopefully gets enacted to allow (Vernon) to remain open,” Gural said Thursday.

The state Gaming Commission said it continues to work with Vernon Downs on its issues.

“Continuity of racing has long been important to the state,” Gaming Commission spokesman Lee Park said, adding the sides have “maintained regular communication regarding the track’s status. The parties hope to identify a pathway under which all entities are satisfied.”

Batavia Downs, meanwhile, said it wants a lower tax rate that’s similar to other gambling facilities in the region.

“Having created new state casinos and a hypersensitive business environment without leveling the playing field, potentially means job cuts here and additional loss for horseman through central and western New York,” Batavia Downs said in a statement last month.

Lobbying the Legislature


Empire City at Yonkers Raceway is also lobbying the Legislature. It wants a change to its capital fund — a piece of the annual revenue it gets to keep to put toward upgrades to its facility.

Last year, Resorts World in Queens, the highest grossing facility in the state, got its own capital fund — which the other tracks already had — as part of a deal to add video-lottery terminals in Nassau County and pledge to build a $300 million expansion with a hotel and resort at the Queens facility at Aqueduct Racetrack.

But Resorts World’s capital fund is uncapped, while Yonkers is limited to $2.5 million a year. So Empire City, the largest private employer and taxpayer in Yonkers, is looking for greater parity with Resorts World as it hopes to expand with a parking garage, bus terminal and hotel.

“Our growth potential for this property is tremendous,” said Empire City spokeswoman Taryn Duffy.

The Gaming Association said the tracks overall made $264 million in capital improvements last year.

Record revenue

Lawmakers said they are considering a number of options to make sure the gambling industry remains strong. The legislative session runs to June 21.

“A lot of jobs depend on this. A lot of money that goes to education depends on this,” Assembly Racing Committee chairman Gary Pretlow, D-Yonkers, said. “It’s an industry that we created and have to keep afloat now.”

The Gaming Commission announced last week that the Lottery and the racinos produced nearly $9.7 billion in revenue in the fiscal year that ended March 31, a state record.

Of that, the revenue from the video-lottery terminals was about $2 billion, up slightly from the previous fiscal year.

Senate Racing Committee chairman John Bonacic, R-Mount Hope, Orange County, said it’s too soon to know the full impact of the new casinos on the racetracks.

While two new casinos have opened, the third and largest won’t open until next year: the $1 billion Montreign casino in the Catskills.

Bonacic said the Legislature has the ability to modify the revenue-sharing agreements with the tracks if they struggle because of the new casinos.

“You can’t really access the impact of the interrelationship” yet, Bonacic said. “But I will tell you that we have tools in our toolbox to always adjust things to make sure we keep both (the casinos and tracks) going. They are both valuable.”