In January this year the chairman of a key New York state Senate committee said that some racetracks should receive a higher percentage of their casino winnings. At present 60% of the slot machine revenue goes to the New York lottery. The smaller tracks include Vernon Downs, Tioga Downs, Batavia and Monticello. The company that owns the harness racing track at Vernon Downs has said that the Oneida County track cannot survive if it continues to pay 60% of casino winnings to the state and 10% to race winners and a breeding fund.

A major problem is that Vernon Downs must compete on an unequal footing with the tribal Turning Stone Resort and Casino five miles away. The racetrack’s casino opened last October with 777 electronic gambling machines. Turning Stone has 2,400 machines, 19 restaurants and 5 golf courses, and does not pay taxes. American Racing & Entertainment, formed by Jeff Gural and Nevada Gold, last year brought Vernon Downs out of bankruptcy and negotiated a reduction in the state tax from 70% to the present 60%.

There may be some resistance to lowering the tax again, although it has been suggested that the 10% that goes to the lottery for administration, US$42 million last year, is higher than the actual cost of administration. In March the state racing board limited Vernon Downs’ licence to race to just one month at a time because of continuing financial problems at the track. Today the regulators will decide whether racing can continue there this season. (E-07.31.07)

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