Absent a Deal, Finger Lakes Future in Doubt

Thoroughbred trainers, owners, and breeders are scrambling to determine the future of Finger Lakes Gaming and Racetrack after New York lawmakers recently ended their 2016 session without resolving how racing will be able to compete with a commercial casino due to open next year less than 30 miles away.

"Half of the members are angry, half are in tears," said David Brown, president of the Finger Lakes Horsemen’s Benevolent and Protective Association.

The industry had sought special protections against looming competition from del Lago casino, which is due to open next year in a location just a couple of exits away on the state Thruway between Rochester and Syracuse. Track supporters had originally requested that the owners of the casino opening in 2016 be required to reduce the cannibalization of gambling dollars by funding a program to keep purse money derived from video lottery terminals at 2013 levels.

Nearly 60% of Finger Lakes purses are funded by proceeds from the track’s VLTs. The facility that is expected to take a revenue hit of between one-fourth and one-half once del Lago opens, depending on who is doing the projections.

The state set up special zones meant to protect tracks located within those commercial casino areas from being financially harmed once three Las Vegas-style casinos open. But Finger Lakes is just outside the del Lago zone, thereby making it ineligible—without intervention by the state or some sort of private side deal—for the protection funding.

The track’s horsemen had also argued that a budget deal in March provided tax breaks to Delaware North Companies, owner of the track and VLT casino, as a way to protect revenue for the company. But nothing, they said, was done to ensure racing will be able to continue in the face of an expected big falloff in purse levels once del Lago opens.

After last-minute talks at the Capitol, Brown said the situation became a stalemate.

"We’re caught in one of these situations where everybody else says someone else should help, and we’ve got no place to go," Brown said of various funding deals floated involving Delaware North, the owners of del Lago, and the state of New York.

The track is a prime location for New York-bred races, and breeders in New York say its possible closure would hit their industry sharply.

Jeffrey Cannizzo, executive director of the New York Thoroughbred Breeders, said del Lago approached his group with an offer to pay Finger Lakes horsemen nearly $500,000. That was the amount del Lago was going to have to pay Tioga Downs, a Southern Tier harness track within the specially created protection zone with del Lago; Tioga Downs, though, is seeking to obtain the state’s fourth commercial casino license that would absolve del Lago of having to make any payments to that facility.

"This offer, which came in the waning hours of the legislative session, could at least mark the beginning of substantive negotiations with Delaware North about the possibility that, given the estimated $13 million in gaming tax relief granted to this gaming/racetrack operator by the state, they could ante up the remainder of what would be lost to the horsemen’s purses from the opening of del Lago," Cannizzo said.

Cannizzo said he believes the horsemen’s strategy is to possibly strike a deal with both del Lago and Delaware North without the need for legislation. The legislature June 18 ended its 2016 session and is not due back in Albany until January 2017.

"I'm hoping the (horsemen's) strategy has results, specifically with Delaware North, who made out best this legislative session while they continue to be negligent to their horsemen," Cannizzo said.

Brown said the regular purse account, not including breed development funds, is about $16 million, and that for every 10% loss in VLT proceeds there will be a corresponding $1.1 million drop in the purse account. Brown said his board met on the last day of the legislative session, and there was a unanimous conclusion that "we would welcome further discussions with (del Lago) but preferred a universal settlement to include Delaware North and others if necessary."

The $470,000 he said was offered to horsemen by del Lago was insufficient to cover what he suggests will be a purse cut of about $4 million once del Lago opens. He said a message was also sent from del Lago via lobbyists: The horsemen should never ask for more than the initial $470,000 payment, and that the horsemen give del Lago "good publicity.’’

Brown said the offer was never conveyed directly to the horsemen’s group by the owners of del Lago, and he said he isn't sure if it was a real proposal or trial balloon. Brown said his group has asked the New York State Gaming Commission and the offices of Gov. Andrew Cuomo and Assemblyman Joseph Morelle to oversee a meeting of all the sides in the matter. He said nothing has come of the request.

To press its case, the Finger Lakes horsemen paid $10,000 per month for a two-month, end-of-session Albany representation deal with a politically wired lobbying firm, Park Strategies, which is run by former U.S. Se. Alfonse D’Amato. The association also tapped former New York Racing Association track announcer Tom Durkin to be the voice on a radio ad campaign that warned about the track's potentially dire future.

"We put on a full court press. It didn’t get us anywhere," Brown said.

Absent a private deal, Brown said the last hope is to try again to get the issue on the table in state budget deliberations next spring. But by then, he said, the uncertainty will have already driven away a number of Finger Lakes horsemen and trainers to tracks in other states.

Brown said his group's board is meeting June 27. "I don’t know whether to tell them to pack up their farms and leave or say there’s still hope yet," he said.

Brown said some efforts have been made to help prop up the racing side of Finger Lakes, including signal export arrangements to places like Spain and England. He noted Finger Lakes has a heavy emphasis on trainer/owner operations, with most owners having small stables of between four to 10 horses.

"They’re local people, which is unusual for a track," he said, noting there are 37 farms within 12 miles of the track that in some way—from boarding to breeding—rely on Finger Lakes. Without naming them, he said local breeding operations have slowed this year and that some of the bigger trainers at Finger Lakes are already applying for stall space at out-of-state tracks.

Brown said the number of racing dates and the purse levels are predicted to be so low once del Lago opens there is growing pessimism about the track's ability to keep offering live racing.

"I have board members saying that instead of bleeding ourselves to death, let’s just shut it down," he said. "The number of days will be so low and the purses so low, why not end it and say goodbye?’"