New life in NY
New life in NY
Reworked VLT provisions may finally bring machines to New York area tracks
Video lottery gaming in New York appears ready to be jump-started as Gov. George Pataki supported a state budget that includes VLT provisions designed to address the problems that have kept the games from providing desperately needed revenues. Although the bill legislators approved on March 31 provides more revenue to the racetracks offering the machines, key among its provisions were measures designed to get gaming up and running at Aqueduct and Yonkers, the two New York City area tracks expected to produce the most revenues.
Under the original law, the racing industry received 29 percent of net VLT revenues, with the tracks netting a little more than 20 percent initially, the rest going to horsemen and breeders. The new bill provides a little more to the industry, based on sliding scale of net VLT revenue. Of the first $50 million in revenue, the industry would receive 32 percent; on the next $100 million, 29 percent; and on anything over $150 million, 26 percent. Under the original proposal included in the March 31 budget, purse and breeders' funds would come from those shares per agreements with the tracks. That idea didn't sit well with all parties, however, though discussion appears to have produced a compromise. Additional legislation has been offered that will provide a pool for purses and breeders' funds, which the legislature will appropriate annually.
The shift in the way purse and breeders' funds are allocated is in response to a ruling last year that it was unconstitutional to allocate lottery funds for any purpose other than education or retailer (i.e. racetrack) commissions. That was one of the issues preventing Aqueduct and Yonkers from getting started. The other main issue affecting Aqueduct was addressed by ensuring that MGM Mirage will operate the Aqueduct VLT facility regardless of whether the New York Racing Association keeps its franchise to run the track.
The legislation also creates a new marketing and promotional fund, which gives additional revenue to tracks to support the VLT operations. Tracks would receive 8 percent of the first $100 million in VLT revenue, and 5 percent of revenue over $100 million. At Aqueduct and Yonkers, the money would be capped at 4 percent of total VLT revenue.
"Having more money for marketing is certainly a positive," said Ron Sultemeier, president of Delaware North Companies Gaming and Entertainment, which runs three of the four existing video gaming operations. "We know we need to do more for the customer, and this is going to allow us to do so."
He explained that of the three facilities under its operation-Saratoga, Finger Lakes, and Buffalo-the Fairgrounds at Buffalo will benefit most, as it is in the most competitive market and really needs the additional support. The implementation of a full player tracking system at Fairgrounds will be the first item on the agenda, along with some facility improvements such as parking lot upgrades. But all three operations will benefit from the additional funds. "This will allow us to run better operations, which will help the numbers, the purses, and the state," he added.
-Patricia A. McQueen
Reworked VLT provisions may finally bring machines to New York area tracks
Video lottery gaming in New York appears ready to be jump-started as Gov. George Pataki supported a state budget that includes VLT provisions designed to address the problems that have kept the games from providing desperately needed revenues. Although the bill legislators approved on March 31 provides more revenue to the racetracks offering the machines, key among its provisions were measures designed to get gaming up and running at Aqueduct and Yonkers, the two New York City area tracks expected to produce the most revenues.
Under the original law, the racing industry received 29 percent of net VLT revenues, with the tracks netting a little more than 20 percent initially, the rest going to horsemen and breeders. The new bill provides a little more to the industry, based on sliding scale of net VLT revenue. Of the first $50 million in revenue, the industry would receive 32 percent; on the next $100 million, 29 percent; and on anything over $150 million, 26 percent. Under the original proposal included in the March 31 budget, purse and breeders' funds would come from those shares per agreements with the tracks. That idea didn't sit well with all parties, however, though discussion appears to have produced a compromise. Additional legislation has been offered that will provide a pool for purses and breeders' funds, which the legislature will appropriate annually.
The shift in the way purse and breeders' funds are allocated is in response to a ruling last year that it was unconstitutional to allocate lottery funds for any purpose other than education or retailer (i.e. racetrack) commissions. That was one of the issues preventing Aqueduct and Yonkers from getting started. The other main issue affecting Aqueduct was addressed by ensuring that MGM Mirage will operate the Aqueduct VLT facility regardless of whether the New York Racing Association keeps its franchise to run the track.
The legislation also creates a new marketing and promotional fund, which gives additional revenue to tracks to support the VLT operations. Tracks would receive 8 percent of the first $100 million in VLT revenue, and 5 percent of revenue over $100 million. At Aqueduct and Yonkers, the money would be capped at 4 percent of total VLT revenue.
"Having more money for marketing is certainly a positive," said Ron Sultemeier, president of Delaware North Companies Gaming and Entertainment, which runs three of the four existing video gaming operations. "We know we need to do more for the customer, and this is going to allow us to do so."
He explained that of the three facilities under its operation-Saratoga, Finger Lakes, and Buffalo-the Fairgrounds at Buffalo will benefit most, as it is in the most competitive market and really needs the additional support. The implementation of a full player tracking system at Fairgrounds will be the first item on the agenda, along with some facility improvements such as parking lot upgrades. But all three operations will benefit from the additional funds. "This will allow us to run better operations, which will help the numbers, the purses, and the state," he added.
-Patricia A. McQueen
