State Bailout Saves N.Y. Racino From Closure
There are 300 very happy people at New York’s Vernon Downs this week.
The Syracuse-area racetrack and racino will not close, as was announced last month, which means 300 jobs have been rescued―along with $20 million in local government tax revenue―thanks to a $2 million bailout brokered by state lawmakers and Governor Andrew Cuomo after the Legislature had adjourned on June 28 for the summer.
The negotiations did no go well for two other tracks hoping for better deals of their own in the Empire State’s increasingly crowded gaming market: Batavia Downs in Genesee County in the west and Empire City Casino in Yonkers. Both came away empty-handed and will have to wait until lawmakers return to Albany in January.
“I’m thrilled because it has been such a struggle, and I’m mainly thrilled for my employees and the people at Vernon. It could have wiped out the town,” said Jeff Gural, who owns Vernon Downs and Tioga Downs in the south of the state.
“You just get to a point where you just want to be able to save and preserve these 300 jobs,” said Senator Joseph Griffo, who represented the track in the negotiations.
Claiming losses of $150,000 a month, Gural planned to shutter the entire Vernon Downs operation―the track, the gaming floor and a supporting hotel―beginning in September. That was averted when the Assembly and Senate agreed on a plan to kick back more of the state’s share of the take from its video lottery machine games. The basics are that Vernon Downs will keep 75 percent of the money that was going to the state Gaming Commission for administration of the VLTs. It will also get to use money designated for capital improvements to pay for operating expenses.
“It will probably let me break about even,” Gural said.
Empire City, which competes directly with the giant racino at Resorts World New York City in Queens, was pressing for a reimbursement from the state that will allow it to invest $180 million to build a hotel, parking garage and other amenities that would add 850 construction and permanent jobs. The Senate approved such a plan, but the Assembly did not act on it.
“Instead, Empire City will remain stagnant,” a spokesman for the facility said, “and the state will likely see a decline in education revenue.”
Batavia Downs, which was looking for tax parity with competing tracks in its market, saying it pays a higher rate than Finger Lakes and Buffalo Raceway, also came away disappointed.
“We are the only municipally owned gaming facility in the state. It does not make any sense to our member municipalities that private wealthy business owners pay a lower tax rate on their gaming facilities,” COO Michael Nolan said.
Batavia Downs is owned by Western Regional Off-Track Betting, which shares its profits with 15 counties and the cities of Rochester and Buffalo.