Vol. 4, No. 10, October 2007
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New York bids out Big A
The New York Division of Budget has set October 15 as the deadline for companies to express interest in operating video lottery terminals for the state at the Aqueduct racetrack in New York City.
The state might hire a contractor to run a new facility the state would build and own, Governor Eliot Spitzer’s office says. It is also considering having an operator develop the facility and “retain excess VLT revenues after making statutory payments for education and racing” and covering expenses.
The state estimates “net machine income” (NMI) from as many as 4,500 Aqueduct VLTs at more than $500 million by 2010. The government will take “in excess of 70 percent” of NMI to fund education, operate the state lottery and support thoroughbred horse racing.
Aqueduct is a thoroughbred track, as are the Belmont and Saratoga tracks. Spitzer has recommended that the New York Racing Association keep the state franchise to run racing at all three. He expects to select a VLT operator around November 1 for Aqueduct and perhaps Belmont.
State senators scrutinizing the NYRA recommendation last week heard expert testimony that Spitzer’s plan does little to increase NYRA’s public accountability and that “integrity reviews” the state contracted for NYRA and three other franchise bidders were poorly performed. The Senate and Assembly must ratify Spitzer’s choices.
“The bidder with the most far-sighted business model” should be selected, said Senator Bill Larkin, chairman of the Senate Committee on Racing, Gaming, and Wagering.
Senate Majority Leader Joseph Bruno said the governor may need to revise his proposals. “There are a lot of highly qualified, highly financed major players from all around the world who have an interest, and I think this is big enough to include a lot of others,” said Bruno.
Among them are three other bidders for the racing franchise with slot-machine expertise among their ranks. Empire Racing Associates and Capital Play said last week that they will try for a VLT contract. Excelsior Racing Associates gave no comment.
The three bid over the summer on the new racing franchise, due to go into effect January 1. Why Spitzer opened the VLT operation to more bidders wasn’t clear.
