Questions for the NY guys

[Dancer's Image]

from Thoroughbred Times...

Posted: 7/8/2005 5:01:00 PM ET

Top New York court refuses to rehear challenge to law legalizing VLTs

The New York Court of Appeals on Wednesday refused to open a case challenging the legality of video lottery terminals at the state’s racetracks.
Without comment, the court denied a motion to rehear the case, which distinguished VLTs from slot machines and permitted revenues from VLTs to increase purses and furnish breeder awards. Slot machines are expressly forbidden under the New York Constitution, the Albany Business Review reports.
The primary plaintiff testing the law was Saratoga County Chamber of Commerce President Joseph Dalton.

...so are VLT's legal or not? Are VLT's used at all the NY tracks? How much do they add to the revenues of the NY tracks?

[Figman]

The machines are not really VLTs, they are VGMs (video gaming machines) that in reality are automated lottery scratch off tickets. Unlike slot machines these VGMs are not independent but are all linked together to a central computer in Schenectady, NY, the headquarters of the NY Lottery.

The Courts have found these VGMs to be legal because they are extensions of the Lottery games. Independently operated "slot machines" are illegal in NYS. What the court found illegal was the revenue distribution stream where money went in a predetermined percentage to the purses and the breeding funds. The court found it "ok" that the So now the horsemen and the breedeing funds have to have separate agreemnts with the racetracks to share the generated revenue.

Currently, Finger Lakes (Thoroughbred) and the harness tracks of Saratoga Raceway, Buffalo Raceway, Monticello Raceway and Batavia Downs are in operation. Yonkers Raceway and NYRA-Aqueduct are under construction with 2006 openings planned. Tioga Downs and Vernon Downs, two currently dormant harness tracks, may try VGMs in 2006. Track licenses to operate live horse racing meets are needed before VGMs are allowed.

The VGM sales reports at the operating tracks are hard to come by. In general Saratoga Raceway and Finger Lakes have had the best results with daily wins per machine (hold) at or near the $200 mark per day. Each of these tracks have over 1,000 machines with Saratoga having close to 1,400.

[Dancer's Image]

Thanks Figman for your reply.

It doesn't matter to me but I'm curious as to why the item in question, should be a video gaming machine (VGM) as opposed to a video lottery terminal (VLT)? The article and the courts call them VLT's and you yourself call them "(video gaming machines) that in reality are automated lottery scratch off tickets" and "these VGMs are extensions of the Lottery games."

Like I said, it doesn't matter to me what you call them, it just seems silly to me. The only thing important to me is that these items do produce money that can increase the purses and thus are good for horseracing.

[GeTydOn]

Good for horseracing? That's debateable. Short term: yes - maybe. Long term: no - not likely.

[tonto1944]

Tioga Downs was a Quater horse trac . It opened in 1976 and closed in 1979.

I was once there with my Father just to see what Quater horse racing was. The race lasted 20 plus seconds and they had 15 races that night ,I think.

Pretty soon every track in the country will have Racino's and we will be back to where we are today. They will all be claiming they are losing money.

[Dancer's Image]

Good for horseracing? That's debateable. Short term: yes - maybe. Long term: no - not likely.

OK, let's debate.

I say raising the purses for the horsemen is good for horseracing.

Only 2 ways to accomplish that, 1) by raising the takeout, and 2) by finding additional funds, ie. through these VLT's.

I am opposed to raising the takeout; therefore, I am in favor of finding additional funds to raise purses.

[Macdiarmadillo]

Racing is going to get less money than everything thinks. Albany wants the money and I'm sure they'll help themselves to most of it. Once the machines are in place at some tracks, Albany will figure their popularity will let them set up machines at places other than tracks. They've already talked about such things happening.

There's already VLTs at the Saratoga Racino-- how much money is coming out of there right now and how much of that has gone into purses?

[Figman]

In 2004, the first year of operation and missing most of January, the Saratoga Raceway (harness) purse fund alone received over $5.7 million dollars from the gaming side and the NY Harness Breeding Fund received nearly $1 million. In 2005 Saratoga Raceway is racing about 50 more dates than in 2004. As to the total revenue, by NY law 61% of all revenue goes to education.

[Dancer's Image]

In 2004, the first year of operation and missing most of January, the Saratoga Raceway (harness) purse fund alone received over $5.7 million dollars from the gaming side and the NY Harness Breeding Fund received nearly $1 million. In 2005 Saratoga Raceway is racing about 50 more dates than in 2004. As to the total revenue, by NY law 61% of all revenue goes to education.

Figman,
Thanks for the figures(you are aptly named)...let me get this straight...61% of the revenue from the VLT's goes to education, does the remaining 39% go to the horsemen? The horsemen received $6.7 million in 2004 so the total revenue would have been about $16.7 for 2004?

[Figman]

In 2004, 61% to edu; 10% to the lottery; the remaining 29% was divided amont the two breeding funds, the purse account and the track operator all by set percentages.

In 2005, that 29% is now higher - maybe 32% and it all goes to the track operator. The horsemens' association and the two breeding funds have to make their own deals with the track operator to get their money. It is expected that the purse accounts will be funded about the same as 2004 percentage-wise but a greater amount in total dollars because of the video gaming growth.