Editorial: Long Island's slot machines churn out questions
The slot machines are coming!
But where will Nassau and Suffolk put the two parlors, which were bestowed by Albany to rescue the finances of the struggling counties?
Will nearby residents have any say in the locations?
How much money will reach county coffers from the 1,000 video lottery terminals at each parlor?
How many more jobs will the parlors create at the county off-track betting corporations that will run them, especially for pals of the politically powerful?
Why do the OTBs need outside operators to run them?
If for-profit gambling pros are needed, why are the OTBs involved at all?
On Election Day, residents will vote on a referendum to expand casino gambling in New York by amending the state constitution. But they will not have a say over whether these video lottery terminals come to Long Island. That was decided in a law that's already signed. In fact, if the state casino referendum fails, the law will allow a second VLT parlor in Nassau and three others statewide.
Bringing two slot parlors to Long Island is not a great idea. They won't create many jobs, engender economic development or add to the quality of life. And they will have a social cost -- from compulsive gambling by those who can least afford to lose -- that will be felt in homes lost and family needs neglected. The parlors were just the most that Long Island legislators could get out of Albany in exchange for going along with the proposal to build resort casinos upstate.
The two parlors won't be easy to place. The OTB Race Palace in Plainview is the likely spot for Nassau County's machines. Officials say rumors that the VLTs might be part of the Nassau Coliseum redevelopment in Uniondale are false.
In Suffolk, county and OTB officials have requested proposals, but say they have no one location in mind, although some suggest using an industrial park.
Although the parlors won't bring prosperity, they will create piles of revenue that could bolster both counties' struggling budgets. Officials say each county could get $20 million per year after the revenue is funneled through each OTB corporation. Each OTB will get 40 percent of the total take to pay operating and marketing expenses, plus 5 percent for horse-racing interests. After those cuts, the OTBs will turn over whatever they don't spend to the counties. It's a structure that begs to be abused, with too much money potentially allocated for vague "expenses" and unnecessary new job titles.
Suffolk OTB is in bankruptcy, with $21 million in debt. Nassau OTB, though solvent, is suffering. Neither has generated any profits for the counties in years, though both counties do realize some funds from bet surcharges. Horse racing is a dwindling enterprise. Diverting the profit from slot machines to keep it going makes no sense.
It could be argued that the OTBs know how to run gambling and can handle the VLTs. However, both OTBs are looking for professional gaming companies to run their VLT operations.
If this weren't a world where everyone wants a cut of the action, the counties could have operated the parlors without the OTBs, and taken 100 percent of the profits. But that wouldn't have salvaged these patronage pits, or saved the jobs they support. Nor would it have given the OTBs power over the contracts with the operators and vendors, plums any politician would love to control.
VLT operations will be overseen by the commission created by the new state law to overhaul gambling. Power over where and how the parlors will be built is held mostly by the local OTBs, but their managers are picked by county leaders.
Concerns of residents near proposed locations must be heard. The OTBs need to be watched like hawks to see that all contracts are legitimate and every penny goes to ease the budgets of the counties. This winning scenario for Nassau and Suffolk still can bring losses if profits are misdirected, lucrative contracts go to cronies giving kickbacks and trashy parlors taint neighborhoods.