One Armed Bandits and Their Four-Legged Friends

It’s got video slots and horse racing, but will the new Yonkers “racino” have legs?


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It’s 1961. Out in Vegas, Frankie, Dino, Sammy, and the boys are drinking their way through six shows a week in the big room at the Sands. In the Bronx, Maris and Mantle are bashing them into that short right-field porch and making a run at that Babe. And in Yonkers, just up the Deegan from that house that that fat guy who could swing a bat built, the horses are doing their nightly dance around the half-mile oval at Yonkers Raceway. And you know what? More people are going to Yonkers Raceway, which opened its doors in 1899, than to Yankee Stadium and the Sands combined.
That’s right, in the early ’60s it was Camelot in the harness-racing business and it’s not hard to figure out why. “Yonkers Raceway used to average around thirty-thousand fans a night,” says Bob Galterio, vice president and general manager. “That was before the state lottery, OTB, Atlantic City, the Connecticut casinos, and Internet gambling. The racetrack was the only legal wagering available.”
In other words, if you wanted a little action—at least legal action—you went to the track. Everyone was happy back then, with the grandstand packed, purses as high as $40,000 for a weekday race, and harness triple-crowners like Niatross and Most Happy Fella making regular appearances.
Fast-forward to the late ’60s and the birth of the lottery, the ’70s, with the advent of OTB and Atlantic City, the ’80s and ’90s and the start of the Native American casinos, and not so suddenly, harness racing becomes an afterthought. “Little by little, attendance declined, which hurt the purses, the quality of the racing, and everything else,” Galterio says. Through the ’90s and past Y2K, things got worse, and it became increasingly difficult to find a pulse in the harness-racing business.
“It really got depressing,” says Alan Mann, thoroughbred owner and author of the horse-business blog,Left at the Gate (www.leftatthegate.blogspot.com). The raceway stopped publishing attendance figures in 1994, Mann reports, when it averaged about 1,700 fans, “but it was probably three hundred or four hundred a night in the last few years.” The place was in decline, he says, but the “real signal of the end was when they closed down the grandstand in 1997. I couldn’t even tell you who was going there in the last few years.” (By way of comparison, it’s not unusual for The Big M track at the Meadowlands to draw 5,000 to 6,000 on an average night.)
If you’ve driven past the raceway in the recent past, you know exactly what Mann is talking about: beat-up parking lots; an empty, unusable parking garage; the gigantic atrium of a clubhouse looking like it needed a good shower and a shave; and very few signs of life. The race purses, which once were as high as $40,000 per race got as low as $40,000 per day, which isn’t a ton of money when it’s stretched out over 10 or more races and split up each race between win, place, show and the next two finishers. The few patrons who were there were the hardcore horse people who, let’s just say, didn’t add any glamour to this crumbling edifice formerly known as Empire City. If this was an empire, it was one on the verge of collapse.
Drum roll please, cue the flashing neon, start the orchestra, get the crooner out here…Bright light city gonna set my soul, gonna set my soul on fire…got a whole lotta money that’s a ready to burn, so get those stakes up higher…Viva Yonkers Raceway!…Viva Yonkers Raceway!
All right, the song needs some work, but you can’t deny the excitement—now that Yonkers Raceway will be resuscitated with some casino action and opening sometime this fall. Insert into the downstate lexicon “racino” (i.e., racetracks with video lottery terminals, VLTs for short, or slot machines by any other name) and get ready to watch Yonkers Raceway—or as it will be known once again, Empire City at Yonkers Raceway—get taken off life support and breathe on its own.
Especially excited is the Rooney family. The family, which also owns the Pittsburgh Steelers, bought the raceway in 1972 for $58 million. In the last few years however, the track has been losing “around four million or five million dollars a year,” family patriarch Timothy J. Rooney, Sr., told Westchester County Business Journal. Not surprisingly, the Rooneys wanted to sell the property (they had a buyer who agreed to pay $100 million) then last year, the court upheld a law passed by Governor George Pataki that expanded legalized gambling. Suddenly, it made more sense for the Rooneys to keep the property and convert it into a racino than to sell it.
In fact, it made a lot of sense. According to the New York State Lottery, the 750 VLTs at upstate racino Tioga in Nichols netted $997,111 in just one week in September 2006. The Rooneys, the state, and the city of Yonkers are betting—with apparently good odds—that the Yonkers racino will do even better given that the raceway is going to have 4,750 more VLTs than Tioga. Indeed, the new Empire City is projected to earn $130 million a year from its slots alone; that’s not counting the proceeds from food, parking, beverages, and, of course, horse racing. All told, Empire City stands to make nearly $28 million a year and the state about $100 million. The money is divvied up beween the state, the Rooneys, the racetrack, etc.
For the most part, local politicians are sanguine about the plans to renew Yonkers raceway. “The track was deteriorating, it was rundown, and the racing industry was suffering,” says Yonkers Mayor Phil Amicone. “It employed very few people. The casino will bring sixteen-hundred new jobs, the revenue will allow for higher racing purses, and the track should come back strong.”
The mayor wasn’t always the casino’s biggest cheerleader. Yonkers originally filed suit because, unlike the state, the city wasn’t going to get a cut of the casino revenue. Because the state racino money is part of the state lottery funds, the lion’s share of the money is earmarked to fund education within New York State. That’s all well and good, but the mayor thought that if Yonkers was going to carry the financial burden that goes along with a racino that expects 29,000 daily visitors—and the traffic and garbage they will generate—then the city should be getting a piece of the pie.
The suit was settled. “We now will get three-and-a-half percent of the revenue capped at twenty-million dollars per year directly from the VLTs, plus our share of the state education funding,” Amicone says.
The idea of transfusing life into harness racing with casino action isn’t a new concept. Yonkers will be just one of the seven harness tracks in the state that have made similar conversions, though it is slated to be the biggest and shiniest star in this racino constellation. With its eventual 5,500 slot machines, it will be the largest of the state’s racinos and, in terms of slot action, will make a respectable rival to Connecticut’s Foxwoods (more than 7,000 slots) and Mohegan Sun (more than 6,000 slots) without the two-hour commute. By comparison, the Seneca Niagara Casino in Niagara Falls has only 4,000 machines and the Turning Stone in Verona, New York, has just 2,400. The six other racinos in New York are located in Batavia (586 machines), Monticello (1,545 machines), Hamburg (1,050 machines), Farmington (1,010 machines), Nichols (750 machines), and Saratoga (1,324 machines).
“The concept of racinos began in Iowa,” says Frank Fahrenkopf, president and CEO of the American Gaming Association. “After the racino conversions, almost immediately, there were better horses and better jockeys. Maybe more important was what it meant to state revenue.”
Fahrenkopf reports that the gaming tax revenue from the racinos for the State of Iowa represents 3 to 4 percent of the entire state tax budget. In Delaware, he says, the racinos account for as much as 8 to 9 percent.
I know what you’re thinking. Iowa? Delaware? This is New York, baby—we got other things to do and, if we want to roll the bones or hit on a soft 17, we got some pretty big casinos within a fairly short drive. Well, raceway manager Bob Galterio is a New Yorker, and he knows that, if Empire City is going to succeed, then it’s going to have to do it in a New York way.
“We’re not putting video lottery machines into a racetrack—we’re creating a facility to rival the casinos that are our competition,” Galterio says. “You’re going to get that casino experience—the beautiful interiors with gorgeous carpeting and first-class design. Our competition isn’t other racetracks but other casinos.”
Sure, it all sounds exciting, but not everyone agrees that adding a casino to the backside of a racetrack is the answer to all the horseman’s woes. In fact, lots of horse people just don’t get what one has to do with the other. Sure, you can quell the not-in-my-backyard complaints by saying that gambling on horses was already going on at Yonkers, but, other than that, what will 5,500 slot machines do for the fans of the four-legged wagering?
“The racino doesn’t do anything to fix racing,” says blogger Mann. “The people playing VLTs aren’t interested in the horses, and there’s no attempt to get them interested in the horses. Pretty soon we’re going to be ‘racinoed out’ because they’re going up all over the place. I see it as a short-term fix.”
If Mann is right, you wouldn’t guess it by the bucks the Rooneys are throwing into Empire City. The renovation is costing the family $225 million, and they’re pulling out all the stops when it comes to decor. Empire City is being designed by the architectural firm of Yates-Silverman Inc., the same team that designed the interiors of some of Vegas’s over-the-top landmarks like New York, New York, which features a scaled-down version of the Manhattan skyline and the Brooklyn Bridge; the Luxor, which is a giant black pyramid; and Paris, which features replicas of the Eiffel Tower and the Arc de Triomphe. Expect the decor at Empire City to jump out and grab you from the moment you step inside.
The original clubhouse, built in 1957, has been gutted, redesigned, and enlarged with a 120,000-square-foot addition. The video lottery terminals will look like slot machines, except they pay out with receipts instead of coins. In its infinite wisdom, the state encourages people to stay away from the term “slot machine” because it likes you to believe that this is all just part of the innocent state lottery. Either way, they’re slots and the things will eat your money.
The clubhouse will have a Victorian theme with elegant woodwork and stained glass, while the new addition will stand in stark contrast with its bright art deco theme, reminiscent of New York in the ’30s. The contrast of the two main rooms is deliberate.
“In the gaming business, people like to go from one casino to another,” Galterio says. “In Las Vegas, the different themes stand next to each other and people go in and out. We wanted to create that feel with our two main rooms.”
Empire City won’t try to win you over just by appealing to your eyes; it’s also going to try to appeal to your taste buds. Yonkers Raceway’s restaurants were, shall we say, not quite world-renowned, but that’s set to change. Tavern 1899 Steakhouse will be back, but it will be all new and, if you’ve been there in the past, you should be pleasantly surprised.
“It is going to compete with steakhouses like Ruth’s Chris and Morton’s,” says Stephen White, director of food and beverage. “If I can get you to eat here, I’m confident that you’ll want to come back.”
The steakhouse will feature prime natural steaks, and you can expect to pay from $30 to $50 for a meal. There will also be the more moderately priced Empire Terrace Dining Room and the casual dining of the Lillian Russell Café. Each of the three is set to seat upwards of 300 diners. In all, there will be 900 restaurant seats when the place opens and another 350 in a food court when the art deco addition opens. When all is said and done, the raceway will be able to feed about 1,000 more patrons than it did before its glamorous makeover.
So does all of this have The Donald shaking in his Pradas over the loss of business in Atlantic City? Are the Mashantucket Pequots at Foxwoods panicked out in Southwest Connecticut? According to Frank Fahrenkopf, probably not.
“There’s a changing dynamic in the industry,” he says. “Ten years ago, gaming represented sixty-five to seventy percent of the casino revenue. Today, it is typically around forty-five percent.” That means, he says, that the greater portion of revenue comes from non-gaming sources. “People go to Las Vegas and Atlantic City for the experience—the great restaurants, the first-class shopping, and the mega resorts,” Fahrenkopf says. “I’m not sure the racinos are competing for the same customers.”
So while Empire City might draw the day tripper with a pocket full of quarters, it may not draw the jet-setters and the modern-day Rat Pack wannabes who long for the big-casino vibe. There’s also the inescapable fact that the only games in Empire City will be the VLTs. There’s no blackjack, craps, baccarat, or anything else. That means that hardcore players and high rollers won’t be drawn to Yonkers, no matter how tender the steaks or how cool the art deco design. If you’ve been visualizing yourself in a tuxedo hovering over a baccarat table like Sean Connery getting ready to say, “Pass the shoe,” you’re out of luck. More likely you’ll be sitting on a barstool staring at an animated screen, pulling a lever every three seconds until you’ve blown the mortgage payment.
The Atlantic City and Connecticut casinos also ply you with free drinks and other comps, and Empire City won’t be in a position to be so generous. The revenue is being split so many different ways—between the Rooneys, the state, and the horse racing—Empire City won’t generate the kind of profits it would need in order to dole out comps. Because casino owners in Las Vegas, Atlantic City, and Connecticut (who share just with their respective states) have far fewer fingers in their pies, they can use their profits to continually improve the casino experience with such perks as free booze, free meals, comped rooms or upgrades, and front-row seats to Wayne Newton as a reward for blowing your kid’s first-semester tuition.
Though Empire City is shooting for a first-class casino experience, the racino is, in many ways, in a different market. With seven million folks in the metropolitan area surrounding the raceway, Galterio is hoping that some will choose Yonkers to satisfy their gambling jones, even if they remain loyal to Atlantic City or Connecticut. “We’re hoping that if you are accustomed to going to Atlantic City four times a month, maybe now you’ll go there once and come to Yonkers three times,” he says.
Will Empire City be a real destination? While most big casinos offer shows and spas and bright lights, the Yonkers casino will still be in, well, Yonkers. It will be a place to spend an evening or an afternoon and that may be enough, but Las Vegas and Atlantic City are going for a little more.
“It’s a different entertainment dollar, unless the revenue is such that the racinos can make capital investments in the facility,” Fahrenkopf says. In other words, if Yonkers can make the big bucks and keep building on and adding to the experience, it still won’t really be in the same game with Atlantic City and the Connecticut casinos.
That may be just fine, especially if you’re in the horse business. In its day, Yonkers was the place for harness action, and there is reason to believe it will return to its yesteryear status. If, as Galterio says, 9.5 percent of the slot revenue will go to the harness purses, that may give the boost the trotters will need. It’s a conservative guess that it won’t take long for the race purses to quadruple and average close to $160,000 per day.
“Better purses mean better horses, more people coming out, more revenue,” says Eric Sharbaugh, executive vice president of the United States Trotting Association, who also points out that most of the folks who play the ponies don’t really co-mingle with the slot players—they’re really two breeds. I guess if the money is coming in, it doesn’t really matter whose quarters are sliding down the slots.
So, in the end, does everybody win? The harness business gets a shot in the arm, landmarks are saved, and our citizens get yet another way to amuse themselves and contribute to the state. Yet, don’t be so quick to assume this is a harmless proposition. Despite the snazzy promotional campaigns designed to make everyone feel like they’re cooler than the Rat Pack, there are some very real things to think about.
“The way we look at it that one-hundred-thirty million dollars is going to be coming out of the pockets of the people of Yonkers and the Bronx,” says Jim Maney, executive director of the New York Council on Problem Gambling. “They’re projecting that Empire City’s going to take in about one-hundred-thirty million a year from the VLTs. And, let’s be honest, it’s going to be coming out of the hands of seniors and women.”
Maney points out that seniors are vulnerable because they have the free time and women are vulnerable because the slots offer games that appeal to them. “We find that when a casino opens in an area, the problem of gambling doubles,” he says. “We’re not for or against gambling, but I do ask the question, ‘Where are people going to get help if they do have a problem?’ There’s not one treatment program for problem gambling in Yonkers or the Bronx and no plans to fund one with the revenue.”
When asked about how Yonkers will address a potential increase in problem gambling, the mayor maintained that the racino isn’t bringing something to Yonkers that doesn’t already exist. “We already have gambling,” he says. “I’m not a big proponent of it, but it is here and, as long as it is, the city should get the money from it. Frankly, I would rather have seen a big industry come in to Yonkers.”
So, what exactly do we have here in Yonkers? Is it the harmless win-win that everyone can be happy about or a shortsighted, $225-million, soon-to-be-white-elephant that will have everyone looking back on it and saying, “Remember racinos? What were they thinking?”
And would Frank, Dino, Sammy, and the boys even hang out here? With no crap tables, no blackjack, and no free booze, I’m not so sure, but that doesn’t mean you won’t have a good time taking your chances, especially after such a short ride from home.
Tom Schreck is a definite Rat Pack wannabe who still wants someone to pass him the shoe in Yonkers—or any place else for that matter. His murder mystery, published by Midnight Ink, is due out in 2007. His short stories are available on Amazon.com.

 

 

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