The symbiotic relationship between horse racing and casino gambling in New York is a model that at least one other state is looking to replicate.
The Assembly held a hearing Tuesday on the impact of the state’s nine racinos, which host electronic gambling machines, known as video lottery terminals, and thoroughbred or harness racing. The hearing focused on how revenues from the VLTs are used to supplement the state’s horse industry and fund education.
Since 2004, when the state’s first racino was created in Saratoga Springs, racinos have accounted for almost $4 billion in education aid and about $750 million in assistance to the horse industry, according to James Featherstonhaugh, president of the New York Gaming Association, which represents the nine racinos. For the current fiscal year, he said, the racinos will account for about $830 million in education aid and just under $200 million for the horse industry.
Featherstonhaugh said the VLT revenue going to the horse industry, with funds supporting breeders and racing purses, has become the talk of Kentucky. That state has noticed New York’s success this year with higher purses at the three New York Racing Association tracks, which have generated more betting, and an investment in horse breeders, which has brought farms back to life.
He noted recent signs from Kentucky’s state Legislature and governor that indicated they wanted to create a gaming system, which would also subsidize their racing industry, potentially at a higher percentage than the New York model.
“I think it’s fair to say that there will be a reaction to what happened in New York,” Featherstonhaugh said.
Meanwhile, there is some indication from Gov. Andrew Cuomo that he wants to change the percentage of VLT revenue going to the horse industry. New York Thoroughbred Horsemen Association President Rick Violette, a non-voting member of the NYRA board, said the ambiguity surrounding VLT revenue now has put future development of the state’s horse industry into a holding pattern. He stressed that horsemen and breeders like to make long-term plans, which isn’t possible when New York’s racing and gambling industries are up in the air heading into 2013, with VLT revenue possibly being diverted, a new state Gaming Commission being created and live-table gambling likely to be approved.
Regardless of what happens with VLT revenues for the horse industry in the next fiscal year, Featherstonhaugh predicted the nine racinos would account for $1 billion in education aid next year.
The state’s nine racinos give a higher portion of their profits to the state than casinos in Las Vegas or Atlantic City. Upon prompting from an assemblyman, Featherstonhaugh said the high rates were probably fair but would need to be adjusted if live-table casino games were approved, as these games are more expensive to run.
The possibility of seven live-table casinos will likely be put to the state Legislature this year and then require approval by voters, at which point Featherstonhaugh said his members would like to discuss a reasonable percentage takeout for live-table games. It is still not certain, however, whether any of the nine racinos will be chosen for live-table games, as the one-sentence proposed constitutional amendment doesn’t specify locations and enacting legislation has not been written.
The benefits of combining a racino and OTB was also addressed at the hearing and can be found at the Capital Region Scene.