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NIFA chief skeptical of video gambling revenue included in 2016 Nassau budget

Jon Kaiman, chairman of the Nassau Interim Finanace

Jon Kaiman, chairman of the Nassau Interim Finanace Authority, speaks during a NIFA meeting in Uniondale on Aug. 19, 2015. Credit: Steve Pfost

The head of Nassau's financial control board and some county lawmakers say they're skeptical that a yet-to-launch video slots parlor can boost revenue by $20 million in 2016, as County Executive Edward Mangano projects in his budget.

The Nassau Regional Off-Track Betting Corp. has not yet revealed the location, but Mangano last week said "they've committed to us, at minimum" to announce a temporary video lottery terminal, or VLT, parlor by early December and have it operational by next spring.

Mangano's inclusion of the $20 million in VLT revenue is based on an OTB-hired gaming consultant's report that found the county could receive at least $27 million annually from a mini-casino with 1,000 slots and electronic table games.

"They're making an overt statement that they're going to do it," Mangano said of OTB officials opening a temporary facility. "They have explained to us this has been done in other areas, and it's kind of a 'cookie cutter' thing that they're able to put in place and operate."

Asked whether he had any hesitation to put the revenue in his budget, Mangano replied: "That's why we have the commitment. There's no doubt VLTs generate revenue for OTB, New York State and the county. No one questions that."

But Jon Kaiman, chairman of the Nassau Interim Finance Authority, the state board that controls county finances, said the VLT projection is a "risk." He noted that the county's 2015 budget predicted $9 million in VLT revenue based on the assumption that a permanent facility would already be open.

"We expected to see similar revenue from this source last year and it didn't pan out," Kaiman said. "I think it is fair to say that the board is skeptical of this revenue line being real after last year's experience."

No guarantee in law

Newsday reported in May that the state law permitting Long Island VLTs contains no guarantee that revenue will trickle down to counties, after a state education fund, the state gaming commission and racing interests each get their mandated shares.

Also, Nassau OTB's plans to find a permanent home for the slot parlor have hit numerous roadblocks, most notably early this year when the agency backed away from its preferred site at the vacant Fortunoff store in Westbury after furious community opposition.

OTB officials declined to comment last week on the plans for permanent or temporary sites.

Sources with knowledge of the situation said the agency is considering the grandstand area of Belmont Racetrack as a permanent home. While state approvals for that location are being sought, OTB also is looking at sites, including a different portion of Belmont grounds, that wouldn't require state approval and at a former county public works facility in Inwood for the temporary slot parlor.

Regardless of the specific site, an OTB gaming consultant said it is realistic for the agency to announce a temporary facility in December and still have it collecting revenue by April.

"You're really looking for a structure that is already operational or almost turnkey," said Rich Baldwin, managing director of Las Vegas-based Union Gaming Group. "You can get it up and running in a matter of weeks to a couple of months."

If OTB chooses that route, Baldwin said, $20 million in revenue for the county next year "is a conservative number."

Legislators skeptical

But County Legis. Carrié Solages (D-Elmont) said relying on that money, even in a $2.95 billion budget, is unsound. "It's like me trying to plan my family budget with the expectation of winning the lottery next year," he said.

Legislative Presiding Officer Norma Gonsalves (R-East Meadow) declined to comment on the $20 million VLT projection, noting that her review of the 2016 budget is ongoing.

But Legis. Judy Jacobs (D-Woodbury) said lawmakers should know more about the temporary VLT plan if they are to be expected to approve the revenue in the 2016 budget.

"Do they have a plan or is this totally just a dream in their minds?" Jacobs said. "The public has a right to know where the temporary site will be and certainly legislators have a right to know. Otherwise, I can't imagine anyone with positive fiscal oversight accepting something like this."

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