Two years after transferring its authority for 1,000 video lottery terminals to a New York City casino, Nassau County, New York, is receiving only a very small cut of revenue projected under the deal.

The 2016 agreement, which ended a bid by Nassau Regional Off Track Betting to open a new VLT facility at Belmont Racetrack, was supposed to supply the Long Island county with a new recurring revenue stream starting in 2018. Nassau County has so far only received $3 million of $20 million it anticipated receiving for its 2018 budget with only half of the planned 1,000 VLTs currently operational at Resorts World Casino on the Aqueduct Racetrack property in Queens.

Resorts World Casino, operated by Genting, stands in Queens, New York, U.S., on Friday, Feb. 10, 2017.
Resorts World Casino in Queens is slated to have 1,000 video lottery terminals set up for Nassau Regional Off Track Betting under a 2016 agreement. Bloomberg News

The deal involved Nassau OTB receiving annual payments from Resorts World Casino’s operator, the Genting Group, which would equal revenue the betting agency projected receiving from VLTs at Belmont. Nassau OTB said at the time of the transfer announcement that Genting would provide it $43 million from 2016 to 2018 with the county then receiving “a steady income stream.” The public benefit corporation’s 2017 financial statements stated that it made $8.8 million of payments and surcharges to Nassau County from the VLT agreement the last two fiscal years.

Nassau County has faced fiscal challenges in recent years with repeated structural budget deficits. The county’s fiscal control board, Nassau Interim Finance Authority, rejected a $2.99 billion 2018 fiscal year budget in December because of uncertain revenue assumptions, prompting new County Executive Laura Curran to submit a revised spending plan on March 15 two months after taking office that contained $54.7 million in new projected savings and revenue. Around $12.8 million in VLT revenue to the county is at risk, according to NIFA.

“The absence of this revenue is making a very difficult financial crisis facing this county even worse,” Curran said in a statement. “Everything must be done to get the additional 500 machines and ensure that Nassau County taxpayers receive the money they were promised by Genting and Resorts World Casino.”

Nassau OTB sold its Farmingdale branch two years ago to Living Faith Christian Church for around $2 million to help settle a $3 million debt payment owed to Roosevelt & Cross for $5 million in revenue anticipation notes sold in 2014 after missing a March 2016 deadline. The corporation has around $4.6 billion of long-term debt outstanding, according to last year’s financial statement. A spokesman for Nassau OTB said the agency has no outstanding bonds.

Resorts World Casino announced last October a $400 million expansion that would accommodate an additional 335 VLT machines along with a new 400-room hotel and restaurants. Michael Levoff, senior vice president of public affairs at Genting, said the full 1,000 VLTs dedicated to Nassau OTB are slated to be fully operational by spring 2019.

Gov. Andrew Cuomo signed the 2013 Upstate New York Gaming Economic Development Act, which allowed Nassau and neighboring Suffolk County to operate OBT VLT parlors. Prior to shelving its Belmont plans, Nassau OTB eyed a mini casino in Westbury, N.Y., but withdrew plans in early 2015 due to community opposition.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.