NY race tracks eye slot machine revenues

Jun 5, 2001 7:06 AM

Standardbred racing in New York was once the envy of the world. Both Roosevelt and Yonkers Raceways attracted the very best horses and trainers and, thus, drew thousands of fans who wagered millions of dollars.

But, times changed. The first victim was Roosevelt Raceway. Impacted by competition for the gambling dollar, the Long Island facility was closed to make way for a higher and better use of the real estate.

Somehow, through it all, Yonkers Raceway, purchased at the height of its popularity by the Rooney Family of Pittsburgh Steelers fame, muddled through.

Suffering along with the tracks were the horsemen who saw that an expansion of gaming could turn their fortunes around. When GamingToday Publisher Chuck Di Rocco suggested to racing executives in the late 80’s and early 90’s that "like McDonalds, you’re going to have to expand the gambling menu if you expect fans to continue coming to your tracks," most track operators laughed at the idea.

Others, however, such as the operators of a pair of defunct tracks in Iowa, or barely surviving tracks in Delaware, implored their lawmakers to approve slot machines.

The results were almost instantaneous. Money flowed, offering benefits to tracks owners, horsemen and to the individual state coffers.

Recently, the Standardbred Breeders of New York funded a study to determine the impact slot machines would have at the state’s five "trotting" tracks and three thoroughbred tracks. To no one’s surprise, the study showed that such a move would benefit the racing industries, as well as the state.

According to the study, as much as $2.7 billion in annual VLT (video lottery terminals) revenue could be generated if the tracks were permitted to install some 22,000 machines.

Legislation to be drafted proposing slot machines would target approximately $1 billion to be placed in the state treasury to support education.

Based on the success experienced by greyhound racing in Rhode Island and Iowa, and horse racing in Delaware and West Virginia, slot machine supporters can envision Yonkers Raceway returning to its lofty position as leader of the harness racing industry. It also would provide thoroughbred racing at the major tracks, Aqueduct and Belmont, and the smaller, Finger Lakes, with sufficient funds to make giant leaps in purse money offered.

Meanwhile, NYRA’s efforts to acquire New York City’s Off-Track Betting operation seem doomed. In order for something to happen regarding the sale of the $1 billion wagering operation, it must take place before the legislative session ends at the end of this month.

The OTB was put up for sale by New York Mayor Rudy Giuliani who hoped to place the operation under the aegis of a private company while generating proceeds in excess of $250 million. However, when bidding for the OTB began, it quickly became obvious that the price would be upwards of $450 million.

Only two bidders remain in the hunt, according to city watchers. They are NYRA, with its partners, Churchill Downs Inc. and TVG, a subsidiary of Rupert Murdoch’s TV Guide, and Frank Stonach’s Magna Entertainment Inc. and his partner, Greenwood Racing.

With all the controversy, politicians in Albany have indicated it was highly unlikely anything would take place this year.