The New York legislature has taken two separate measures to provide tax relief to Vernon Downs Casino Hotel in upstate New York.
The legislation aims to protect the racetrack from closing and to preserve up to 250 jobs. The Senate has already passed one bill, and the other is in its early stages in the Assembly.
Jeff Gural, owner of the NY casino in Vernon, sought tax relief measures, saying he would be forced to close the racetrack and eliminate 250 jobs by the end of the year.
Senate proposal to provide tax relief awaits Hochul’s signature
The first measure, S4817, was passed by the State Senate on June 8. Now Gov. Kathy Hochul has the chance to sign it into law.
The bill removes a tax burden from current legislation. That current law requires Vernon Downs to forfeit its additional vendor fee because of its failure to maintain 90% of full-time equivalent employees compared to 2016. S4817 removes the forfeiture and will allow Gural to keep a higher share of the track’s revenue. The bill rests on Gural’s pledge that he will retain employees.
Assemb. Gary Pretlow (D-Mount Vernon) introduced another measure, A6144A, which aims to correct a tax rate oversight from 2020. That year, then-Gov. Andrew Cuomo gave upstate casinos and racinos a tax break on their slot and video gaming income. Those facilities could seek a 7% tax reduction on their gross video lottery terminal income for five years. The tax break excluded Vernon Downs.
Gural says the property provides jobs for 250 people and $13 million in tax revenue for the state.
Why Vernon Downs is at risk of closing
Gural says that he lost $2 million last year to keep Vernon Downs up and running. The facility lost a key tax break when it was unable to maintain the required amount of full-time equivalent employees through the Covid-19 pandemic.
Gural claims that because of the current law, he is paying $13 million in vendor’s fees to the state on just $28 million in gross revenue.
He says that restoring the vendor-fee tax break would save $2 million and allow the racetrack to break even.
Union joins calls for Vernon Downs tax relief
Last week, the union representing most employees at Vernon Downs weighed in. They said a tax cut would allow the racetrack and casino to remain open and protect jobs.
The union – Workers United Upstate New York – published a news release Friday. In the release, union leaders applauded the lawmakers who are working to approve the tax cut. They urged Gov. Hochul to sign off on the legislation “as quickly as possible.”
The release says Gural agreed to give 25% of any benefits of the legislation back to workers in the form of higher wages.
History of tax breaks for Vernon Downs
Vernon Downs received a similar assist from the state legislature in 2017. In 2017, as now, the facility was losing money, and Gural claimed he would have to shut down. The state moved to give a tax break that would save the racetrack and preserve its jobs.
The Senate and Assembly cut taxes and fees by $2 million, with Gov. Cuomo’s signature.
Sen. Joseph Griffo (R-C-Rome), who helped compose bill S4817, was also there in 2017.
“In 2017, I sponsored and passed legislation to help Vernon Downs because I recognize, understand, and appreciate the important role that the facility plays in the region,” Griffo said in a statement.
“I am pleased that, thanks to the efforts of many partners and as a result of this bill, Vernon Downs will once again receive additional support and assistance to remain operational. This legislation will provide some relief to the employees, families, local governments, and others who rely on Vernon Downs.”
Gural also owns Tioga Downs Casino Resort in New York and Meadowlands Racetrack with FanDuel Sportsbook in New Jersey.