RSS Feed for this Blog

Saturday, January 26, 2008

Harness Horsmen Support New Proposal

- The Standardbred Owners Assocation of New York is throwing its full support (pdf document) behind a bill being introduced in the Assembly by Racing and Wagering Committee Chairman Gary Pretlow. The measure would guarantee harness horsemen 8.75% of VLT revenue (1.25% for breeders), as well as minimum racing dates.

The legislation would give racino owners, especially Jeff Gural, the tax relief they say they need to survive. Gural's Vernon Downs (where the win per machine figure dropped to $92 in December [pdf]), by virtue of the fact that it's located within 15 miles of an Indian casino (Turning Stone), gets the most favorable treatment, with a straight 42% retention rate, up from 32%, with no diminishing scale as the revenues grow. Monticello (if I'm reading this thing right) would get 40% on the first $50 million. Yonkers would get to retain 32% on all revenue, as opposed to the current sliding scale. Tracks would also see their marketing allowance increased from 8% to 10%, except for Yonkers, which goes from 4% to 8%.

Again, Aqueduct is specifically carved out from the 8.75% cut for horsemen, as the proposed NYRA settlement calls for only 6.5% for the thoroughbred horsemen there. No doubt we'll hear the NYTHA point to this measure, should it pass, and ask why the harness horsemen are getting more favorable treatment.

Of course, the extra money for the racinos has to come out of someone's pocket:

Racetrack video lottery terminal operators would get to keep tens of millions of dollars otherwise destined for public education under a bill introduced by some Assembly Democratic leaders.
No, that's actually not a press release from Republicans in opposition, or from the teachers' union; but rather, the lede of James Odato's story in the Albany Times Union today. But, as Pretlow noted:
"If we're in danger of tracks being closed ... we're losing the $50 million anyway." In theory, the new deal would pay for itself, he said, because improved tracks and greater marketing will bolster gambling proceeds.
Odato reports that Spitzer supports the deal. Senate Racing and Wagering Committee Chairman William Larkin said he is still studying the measure.

- Worthwhile piece in the NY Times today about Spitzer's proposal to lease the state lottery to private interests. There's a lot of interest in the idea from Wall Street:
Ten investment banks that have lobbied state officials believe that the state could reap $25 billion to $45 billion now by agreeing to give up a share of future proceeds from its lottery system for the next three to four decades.
(Though reporter Danny Hakim pointedly notes that Wall Street’s credibility is not exactly at a high point, especially when it comes to financial engineering.)

The article also emphasizes a point that a commenter made here the other day regarding the fact that a private company would market the lottery far more aggressively than the state currently does. That would increase competition with other gambling interests such as racing. Other states have studied the idea of privatizing its lottery, but none have seen it through as of yet.