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Batavia Downs leader miffed by inequity in casino earnings tax rate

BATAVIA – Already concerned about the rise of another competitor only 80 miles to the east, the president of Western Regional Off-Track Betting Corp. is all the more frustrated by what he calls the State Legislature’s unfairness over tax rates on gaming revenue.

“The parity we sought that our friends at Finger Lakes received was unsuccessful,” Michael D. Kane said on Thursday, referring to the recently passed state budget. He spoke after a meeting of the corporations directors at Batavia Downs Gaming.

Kane’s frustration springs from efforts by Batavia Downs officials to be charged the same tax rate on net winnings that has been afforded to Finger Lakes Gaming & Race Track in the Ontario County town of Farmington ahead of next year’s opening of the del Lago Resort & Casino in the Seneca County town of Tyre.

The del Lago complex will feature a hotel along with 2,000 slot machines, 75 table games and a 10-table poker room. State lawmakers have authorized a 31.7 percent “effective” tax rate for del Lago, which is located off Thruway Exit 41, Kane said.

“They have been given a 37 percent tax rate on slot machines and 10 percent on table games,” Kane said. “With 80 percent of the revenue coming from the slots – which is the industry standard – that’s an effective rate of 31.7 percent.”

Kane said that Finger Lakes, which is about 30 miles from del Lago, also has been granted the same rate as the new facility, while Batavia Downs is paying a “melded” tax rate of 44.5 percent, not including mandated 10 percent administrative costs.

He said WROTB’s concerns were strongly supported by Assemblywoman Crystal D. Peoples-Stokes, D-Buffalo, and local state senators. “Apparently, the executive side was unconvinced that Lago will have an effect on our operation,” he said.

Kane added that he and other Batavia Downs executives will have the opportunity “as we move through the legislative session to demonstrate that this action will have a negative impact.”

“We’re talking millions of dollars here,” he said. “Let’s protect the existing revenue stream – one that is actually growing. We had a 10.7 percent increase, leading the state by a significant amount, and our success is being ignored.”

In other developments:

• Kane said he will be making a “definitive recommendation” regarding his successor at next month’s board meeting, noting that his proposal includes “lots of changes taking place internally.”

Last June, he announced that he will be stepping down as the organization’s president in July. A native and former mayor of Dansville, Kane has served on the board for 17 years, including the last five as president and chief executive officer.

• The board renewed a contract with Focus Financial of Rochester for a comprehensive insurance package for 2016-17 at a cost of $932,356.

• The board disclosed that surcharges totaled $110,000 and earnings $307,000 for March and that the first-quarter distributions to municipalities totaled $166,754.