RFP issued for broad study of New York gaming, pari-mutuels

By: Tom LaMarra

Posted: July 22, 2019

A study that will analyze “the entire gaming industry” in New York is expected to be completed by the end of the year, according to a request for proposals issued in June by the New York State Gaming Commission.

It has implications for horse racing, which relies heavily on video lottery gaming to support purses and breed development programs for the Thoroughbred and Standardbred industries.

The scope of the study, according to the RFP, includes an analysis of the performance of commercial casinos, video lottery gaming facilities, the state lottery, and Native American casinos. It will assess all state revenue generated by gaming, performance versus market potential, total economic impact of the gaming industry, and competition in neighboring states.

The study will examine “the impact of a change in taxation rates for video lottery and commercial casino games” and provide “recommendations on modification of tax and commission rates under various scenarios,” according to the RFP.

As far as racing goes, the RFP specifically notes “the future negative impact of the upstate Native American and commercial casinos” on operations at Finger Lakes Gaming & Racetrack and Saratoga Casino and Hotel, which offers harness racing. The study also will look at the impact of Jake’s 58 Casino, which is operated by Suffolk Off-Track Betting Corp., on Resorts World New York City, which is located at Aqueduct Racetrack and generates purse and capital improvement revenue for the three New York Racing Association tracks.

The RFP also identifies pari-mutuel racing, as it calls for an analysis of “the effect of modification of live racing requirements for pari-mutuel facilities, including the evaluation of impacts on purses and awards and the likely effects on the breeding industries.” It includes a look at the “sustainability” of all OTB corporations in the state as well as three harness tracks: Batavia Downs Gaming & Hotel, Hamburg Gaming at Buffalo Raceway and Vernon Downs Casino Hotel.

Sports betting, which already was approved for the four new commercial casinos in upstate New York, is included in the study. The RFP asks the winning bidder to provide an “analysis of the potential market for other gaming” including sports betting at commercial casinos; the addition of sports betting at video lottery gaming facilities—racetracks—and OTB outlets; and online sports betting, lottery games and video poker.

The RFP notes that any analysis on sports betting and online sports betting, lottery games and video poker must “presume that a constitutional amendment has passed authorizing such activity.”

According to NYSGC reports for fiscal 2018-19 (April through March), the state tax—for contributions to education—is 44% at Resorts World for video gaming machines and 43%-40% for machines at the facility that fall under Nassau Downs OTB Corp. Of the overall net win for the fiscal year, racing received the following: $52.27 million (7.5%) for purses, $10.45 million (1.5%) for breed development, $27.88  million (4%) for NYRA capital improvements, and $20.91 million (3%) for NYRA operations.

At Finger Lakes, the state tax runs from 45% to 49% based on net win. Purses for the fiscal year earned $9.08 million—8.75% of the net win—while breed development received $1.29 million (1.25%), according to the NYSGC. Not included are “additional commissions” of $17.64 million paid to Finger Lakes in 2018-19 under an earlier tax-relief program that helps it compete with one of the four commercial casinos that opened in early 2017, the fiscal report notes.

(Photo courtesy of Finger Lakes Gaming & Racing)