Thursday, March 17, 2005

1 NEW YORK STATE SENATE 2 3 4 THE STENOGRAPHIC RECORD 5 6 7 8 9 ALBANY, NEW YORK 10 March 17, 2005 11 11:44 a.m. 12 13 14 REGULAR SESSION 15 16 17 18 LT. GOVERNOR MARY O. DONOHUE, President 19 STEVEN M. BOGGESS, Secretary 20 21 22 23 24 25

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(518) 371-8910 1 P R O C E E D I N G S 2 THE PRESIDENT: The Senate will 3 please come to order. 4 I ask everyone present to please 5 rise and repeat with me the Pledge of 6 Allegiance. 7 (Whereupon, the assemblage recited 8 the Pledge of Allegiance to the Flag.) 9 THE PRESIDENT: In the absence of 10 clergy, may we bow our heads in a moment of 11 silence, please. 12 (Whereupon, the assemblage 13 respected a moment of silence.) 14 THE PRESIDENT: Reading of the 15 Journal. 16 THE SECRETARY: In Senate, 17 Wednesday, March 16, the Senate met pursuant 18 to adjournment. The Journal of Tuesday, 19 March 15, was read and approved. On motion, 20 Senate adjourned. 21 THE PRESIDENT: Without 22 objection, the Journal stands approved as 23 read. 24 Presentation of petitions. 25 Messages from the Assembly.

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(518) 371-8910 1 Messages from the Governor. 2 Reports of standing committees. 3 The Secretary will read. 4 THE SECRETARY: Senator Larkin, 5 from the Committee on Racing, Gaming and 6 Wagering, reports: 7 Senate Print 2594, by Senator 8 Larkin, an act to amend the Tax Law; 9 And Senate Print 3276, by Senator 10 Larkin, an act to amend the Tax Law. 11 Both bills ordered direct to third 12 reading. 13 THE PRESIDENT: Without 14 objection, the bills are ordered direct to 15 third reading. 16 Reports of select committees. 17 Communications and reports from 18 state officers. 19 Motions and resolutions. 20 Senator Meier. 21 SENATOR MEIER: Thank you, Madam 22 President. 23 On page number 15 I offer the 24 following amendments to Calendar Number 224, 25 Senate Print Number 2521, and I ask that said

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(518) 371-8910 1 bill retain its place on the Third Reading 2 Calendar. 3 THE PRESIDENT: The amendments 4 are received, and the bill will retain its 5 place on the Third Reading Calendar. 6 SENATOR MEIER: Thank you, Madam 7 President. 8 THE PRESIDENT: You're welcome. 9 Senator Skelos. 10 SENATOR SKELOS: Madam President, 11 there's a Resolution Number 882 at the desk by 12 Senator Larkin. Could we have the title read 13 and move for its immediate adoption. 14 THE PRESIDENT: The Secretary 15 will read. 16 THE SECRETARY: By Senator 17 Larkin, Legislative Resolution Number 882, 18 commemorating the 130th Anniversary of 19 St. Mary's Church of Newburgh, New York. 20 THE PRESIDENT: All in favor 21 please signify by saying aye. 22 (Response of "Aye.") 23 THE PRESIDENT: Opposed, nay. 24 (No response.) 25 THE PRESIDENT: The resolution is

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(518) 371-8910 1 adopted. 2 Senator Skelos. 3 SENATOR SKELOS: Madam President, 4 could we go to the noncontroversial reading of 5 the calendar. 6 THE PRESIDENT: Senator Farley 7 first. 8 SENATOR FARLEY: Thank you, Madam 9 President. 10 THE PRESIDENT: You're welcome. 11 SENATOR FARLEY: I'd just like to 12 wish my colleagues a happy St. Patrick's Day, 13 and wish you, a good Irish woman, a happy 14 St. Patrick's Day. 15 THE PRESIDENT: Thank you. 16 SENATOR FARLEY: And I would hope 17 that you might wish the entire chamber such. 18 THE PRESIDENT: Absolutely. 19 From Mary O'Connor Donohue, I want 20 to congratulate Senator Farley for such a wise 21 motion, and to congratulate everybody for 22 being here and to celebrate your heritage, 23 whatever it may be. It's a good day to do so. 24 SENATOR FARLEY: Well done. 25 THE PRESIDENT: The Secretary

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(518) 371-8910 1 will read. 2 THE SECRETARY: Calendar Number 3 183, by Senator Maziarz, Senate Print 2569, an 4 act to amend the Labor Law, in relation to the 5 appointments. 6 THE PRESIDENT: Read the last 7 section. 8 THE SECRETARY: Section 2. This 9 act shall take effect immediately. 10 THE PRESIDENT: Call the roll. 11 (The Secretary called the roll.) 12 THE SECRETARY: Ayes, 54. Nays, 13 1. Senator Duane recorded in the negative. 14 THE PRESIDENT: The bill is 15 passed. 16 THE SECRETARY: Calendar Number 17 200, by Senator Wright, Senate Print 2528, an 18 act to amend the General City Law, in relation 19 to inspectors of plumbing. 20 THE PRESIDENT: Read the last 21 section. 22 THE SECRETARY: Section 2. This 23 act shall take effect immediately. 24 THE PRESIDENT: Call the roll. 25 (The Secretary called the roll.)

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(518) 371-8910 1 THE SECRETARY: Ayes, 47. 2 THE PRESIDENT: The bill is 3 passed. 4 THE SECRETARY: Calendar Number 5 234, by Senator Volker, Senate Print 20, an 6 act to amend the Tax Law, in relation to 7 extending the expiration. 8 THE PRESIDENT: Read the last 9 section. 10 THE SECRETARY: Section 3. This 11 act shall take effect immediately. 12 THE PRESIDENT: Call the roll. 13 (The Secretary called the roll.) 14 THE SECRETARY: Ayes, 57. 15 THE PRESIDENT: The bill is 16 passed. 17 THE SECRETARY: Calendar Number 18 263, by Senator LaValle, Senate Print 2621, an 19 act in relation to granting the Wading River 20 Historical Society. 21 THE PRESIDENT: Read the last 22 section. 23 THE SECRETARY: Section 2. This 24 act shall take effect immediately. 25 THE PRESIDENT: Call the roll.

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(518) 371-8910 1 (The Secretary called the roll.) 2 THE SECRETARY: Ayes, 57. 3 THE PRESIDENT: The bill is 4 passed. 5 THE SECRETARY: Calendar Number 6 282, by Member of the Assembly Sanders, 7 Assembly Print Number 2928B -- 8 SENATOR SCHNEIDERMAN: Lay it 9 aside. 10 THE PRESIDENT: The bill is laid 11 aside. 12 THE SECRETARY: Calendar Number 13 300, by Senator Larkin, Senate Print 2594 -- 14 SENATOR SCHNEIDERMAN: Lay it 15 aside. 16 THE PRESIDENT: The bill is laid 17 aside. 18 THE SECRETARY: Calendar Number 19 301, by Senator Larkin, Senate Print 3276 -- 20 SENATOR SCHNEIDERMAN: Lay it 21 aside. 22 THE PRESIDENT: The bill is laid 23 aside. 24 Senator Skelos, that completes the 25 noncontroversial reading of the calendar.

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(518) 371-8910 1 SENATOR SKELOS: Thank you, Madam 2 President. 3 If we could ring the bells at this 4 time to alert the members that we're about to 5 go and discuss the controversial calendar. 6 THE PRESIDENT: The Secretary 7 will ring the bell. 8 And we ask that all members take 9 their seats so we can begin the controversial 10 calendar. 11 Senator Bonacic. 12 SENATOR BONACIC: Thank you, 13 Madam President. 14 THE PRESIDENT: You're welcome. 15 SENATOR BONACIC: With respect to 16 Calendar Number 263, Senate Bill Number S2621, 17 I'd like permission to be voted in the 18 negative. 19 THE PRESIDENT: Hearing no 20 objection, you will be so recorded as voting 21 in the negative, Senator Bonacic. 22 SENATOR BONACIC: Thank you. 23 THE PRESIDENT: Senator Skelos. 24 SENATOR SKELOS: Madam President, 25 would you please recognize Senator Bonacic.

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(518) 371-8910 1 THE PRESIDENT: Senator Bonacic. 2 SENATOR BONACIC: Thank you, 3 Madam President. 4 I would just like to come back 5 to -- let me just put my glasses on a 6 minute -- Calendar Number 263, Senate Number 7 2621. 8 We've changed the rules of the 9 house. And I know that now we have to be 10 present on the consent calendar to vote no. I 11 would like to say if I had been here, I would 12 have voted no. 13 Thank you, Madam President. 14 THE PRESIDENT: Senator Skelos. 15 SENATOR SKELOS: Madam President, 16 if we could now go to the controversial 17 reading of the calendar. 18 THE PRESIDENT: The Secretary 19 will read. 20 THE SECRETARY: Calendar Number 21 282, by Member of the Assembly Sanders, 22 Assembly Print Number 2928B, an act to amend 23 the Education Law. 24 SENATOR SCHNEIDERMAN: 25 Explanation.

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(518) 371-8910 1 THE PRESIDENT: Senator Padavan, 2 an explanation has been requested. 3 SENATOR PADAVAN: Thank you, 4 Madam President. 5 This legislation would enable the 6 City of New York to continue bus contracts for 7 our children beyond the current contract, 8 which expires the end of June, June 30th of 9 this year, through a process that would allow 10 them to negotiate with those vendors who are 11 few in number that provide this level of 12 education. As opposed to an RFP, which would 13 cost, by their estimates, $240 million more 14 annually. 15 This approach makes sense from 16 many, many different vantage points. It ties 17 the increases into the price indexing that is 18 applicable nationwide, the CPI. It allows the 19 city to come up with an appropriate level of 20 cost that would preclude competitive bidding, 21 which would be much higher, history tells us. 22 And as I indicated at the outset, 23 we're talking about $240 million in savings. 24 THE PRESIDENT: Does any other 25 member wish to be heard?

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(518) 371-8910 1 Senator Stavisky. 2 SENATOR STAVISKY: Thank you, 3 Madam President. 4 When I first saw the bill, I had 5 reservations because whenever we eliminate 6 competitive bidding or RFPs, I was concerned. 7 I am totally convinced that this is 8 a good bill, that apparently nobody really 9 wants to bid on the bus contracts any longer. 10 They can't make money on them. 11 And to continue it, to extend it 12 for the five-year period that this bill does, 13 and in conjunction with reforms that the bus 14 operators apparently are planning to initiate 15 in terms of training of the drivers, improved 16 work rules and so on, it seems to me that the 17 savings to the city of New York is a -- it's a 18 good bill, and I'm delighted to support it. 19 THE PRESIDENT: The debate is 20 closed. 21 The Secretary will ring the bell. 22 Read the last section. 23 THE SECRETARY: Section 2. This 24 act shall take effect immediately. 25 THE PRESIDENT: Call the roll.

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(518) 371-8910 1 (The Secretary called the roll.) 2 THE SECRETARY: Ayes, 55. Nays, 3 zero. 4 Those Senators absent from voting 5 on Calendar Number 282 are Senators Balboni 6 and Sampson. 7 THE PRESIDENT: There is a local 8 fiscal impact note at the desk. 9 The bill is passed. 10 The Secretary will continue to 11 read. 12 THE SECRETARY: Calendar Number 13 300, by Senator Larkin, Senate Print 2594, an 14 act to amend the Tax Law, in relation to video 15 lottery gaming. 16 SENATOR SCHNEIDERMAN: 17 Explanation. 18 THE PRESIDENT: Senator Meier an 19 explanation has been requested. 20 SENATOR MEIER: Thank you, Madam 21 President. 22 This is Senator Larkin's bill. 23 This bill revises the VLT program, really to 24 incentivize the tracks, to get the program up 25 and running, and of most concern, I think, to

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(518) 371-8910 1 everyone in the chamber, to get the dollars 2 flowing for the intended purpose of supporting 3 education. 4 The bill does that by increasing 5 the vendor fee from 29 percent to a higher 6 percentage. That gives the tracks the revenue 7 they need. It institutes a sliding-scale 8 vendor fee that recognizes the percentage of 9 overhead costs that's incurred by smaller 10 racetracks that install VLT machines. There's 11 going to be a larger percentage than for 12 larger tracks. 13 This really is an effort to provide 14 an economic incentive for those tracks that 15 need it and to get this program running. 16 We're leaving probably $850 million a year on 17 the table that should be going into the 18 classrooms of this state. 19 THE PRESIDENT: Senator Sabini. 20 SENATOR SABINI: Thank you, Madam 21 President. On the bill. 22 THE PRESIDENT: You may proceed 23 on the bill. 24 SENATOR SABINI: This bill, as 25 well as the next calendar item, comes out of

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(518) 371-8910 1 the Racing and Wagering Committee. And it's 2 designed really to force an action on the part 3 of the other house, since we really -- they 4 have not come up with a policy decision on 5 this. 6 This comes as a result of the court 7 decision that said that the racinos that are 8 operating cannot pay money to the horsemen and 9 the breeders because it violates the state 10 constitutional amendment that allowed the 11 lottery which said all proceeds should go to 12 education. So the two bills, and I'll sort of 13 address both of them, take varying approaches 14 to how to fix that. 15 The fact remains that if we don't 16 do this, not only are those racinos in 17 jeopardy of cessation of their operations, 18 which would a bad thing for Saratoga and 19 Buffalo and Monticello, but the big kahunas of 20 the racino program are Aqueduct and Yonkers. 21 And the partnership that 22 particularly NYRA has with Aqueduct is -- 23 hinges on a partnership, rather, with MGM 24 Grand, who is providing a lot of the financing 25 for the refurbishment of the grandstand area

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(518) 371-8910 1 where the racino will be operating. And they 2 have been reluctant, frankly, to put up the 3 tens of millions of dollars necessary unless 4 they know that they can do this legally and 5 not have a threat of closure from the courts. 6 So there are literally thousands of 7 jobs at stake in Queens County and over a 8 thousand in Westchester County that will rely 9 on the fix of this legislation. 10 So it's important for the education 11 budget to get more money in. It's also 12 important for the economy, for jobs. And 13 particularly in the county that I'm from, in 14 Queens, we will see lots of good-paying jobs 15 established if these bills go through. 16 Now, one of the other features of 17 this legislation is to change the promotional 18 aspect of these establishments. Right now, 19 when you go to Atlantic City or if you go to 20 Connecticut, or soon if you go to 21 Pennsylvania, you'll find that the players are 22 treated well. There are things that they do, 23 enhancements that they do, the operators do, 24 to get players to spend more time and more 25 money. Now, that can range anywhere from

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(518) 371-8910 1 beverages to apparel to meals. 2 Yet in New York we're very limited 3 on this. In fact, the promotional budget is 4 so small, it's really laughable. And people 5 have a choice as to where they can go with 6 their money if they want to spend it in an 7 afternoon at a bank of slot machines, and 8 they're going to go where they feel more 9 welcome and where they feel they're getting 10 more for their money. 11 Additionally, there's an upstate 12 economy aspect to this. Besides the danger of 13 Monticello and Buffalo and Saratoga racinos 14 closing if we don't do something is the fact 15 that the smaller harness tracks upstate will 16 be able to take advantage of this now. 17 And in the first bill, there's a 18 sliding scale as to how much the track would 19 get as, in effect, a vendor. Because under 20 the Lottery Law, every newsstand that sells a 21 lottery ticket gets a percentage for being the 22 vendor. So the tracks would get a sliding 23 scale based on the size of the take as a 24 vendor fee. And the smaller tracks would get 25 a little bit of a higher percentage as a

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(518) 371-8910 1 vendor. 2 And currently there are tracks that 3 are either not operating on or on the verge of 4 not operating, in places like Tioga, 5 Vernon Downs, Batavia. These tracks really 6 need these racinos to come up and operate, not 7 only so we can all benefit from the jobs, we 8 can all benefit from the income, but that we 9 can also keep the very important harness 10 breeding industry in New York -- which was an 11 industry that was unparalleled, really, in the 12 country but now has fallen on hard times -- 13 keep the harness industry in New York going. 14 So each bill is not mutually 15 exclusive. I intend to vote for both of the 16 bills. The committee reported out both bills. 17 I want to commend Senator Larkin on 18 his hard work on this. And despite the fact 19 that his voice has been failing him, his 20 stewardship on this legislation has been 21 steadfast. 22 And either bill, really, would do 23 something positive to keep this program going 24 and to expand it so we can get the much-needed 25 revenue and create the jobs.

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(518) 371-8910 1 Thank you, Madam President. 2 THE PRESIDENT: Senator Libous. 3 SENATOR LIBOUS: Thank you, Madam 4 President. I too want to speak on the bill, 5 if I may. 6 THE PRESIDENT: You may proceed 7 on the bill, Senator Libous. 8 SENATOR LIBOUS: This bill will 9 help to create a great opportunity in upstate 10 New York. Because if this bill is passed, 11 Tioga Downs, which was has been closed for 12 about twenty years, will be reopened. And 13 along with that, it will create about 350 14 jobs. It will generate some $50 million that 15 will go into education funding. And it will 16 breathe new life into the Southern Tier on 17 Route 17, in the town of Nichols in Tioga 18 County. 19 So I would urge my colleagues to 20 pass this. This is a good piece of 21 legislation. This helps reallocate and will 22 take an area that is dying for new opportunity 23 and growth, an area that needs the jobs, will 24 help them to grow. And it is a great 25 investment on our part to the future of that

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(518) 371-8910 1 region of the state. 2 THE PRESIDENT: Senator Rath. 3 SENATOR RATH: Madam Chairman, I 4 rise to congratulate Senator Larkin on this 5 very creative piece of legislation and comment 6 that Batavia Downs, the country's oldest 7 lighted harness track, will benefit 8 dramatically from this. 9 For those of that don't know, I 10 would only add that Batavia, in my district, 11 situated neatly between Rochester and Buffalo, 12 was named by Site Selection Magazine as the 13 8th most important "minipolitan" in the 14 country. Our economic development programs 15 and our aggressive effort to help upstate 16 New York have paid off dramatically for 17 Batavia. We will congratulate them officially 18 here with a resolution. 19 But to have Batavia Downs have this 20 opportunity, it will only add to their 21 minipolitan stature and hopefully more 22 businesses will come to Batavia and upstate 23 New York. A rising tide lifts all ships. 24 THE PRESIDENT: Senator Krueger. 25 SENATOR LIZ KRUEGER: If the

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(518) 371-8910 1 sponsor surrogate would rise for a question. 2 I believe that's Senator Meier. 3 THE PRESIDENT: Senator Meier -- 4 SENATOR MEIER: We have so many 5 to choose from. So let's hear the question 6 and then we'll fight it out as to who gets to 7 answer. 8 THE PRESIDENT: Will you take a 9 question, Senator Meier? 10 SENATOR MEIER: Yes, I will. 11 THE PRESIDENT: All right. You 12 may proceed, Senator. 13 SENATOR LIZ KRUEGER: Senator 14 Meier, in your explanation before, you said 15 that this could bring in as much as 16 $850 million for education. I assume you 17 meant on an annualized basis. 18 SENATOR MEIER: On an annualized 19 basis. Just for Yonkers. 20 SENATOR LIZ KRUEGER: The Yonkers 21 track alone could bring in $850 million for 22 education? 23 SENATOR MEIER: I myself am not 24 familiar with the -- no? Senator Sabini is 25 shaking his head.

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(518) 371-8910 1 That's overall. 2 SENATOR LIZ KRUEGER: Overall. 3 Through you, Madam President, if 4 the sponsor would continue to yield. 5 THE PRESIDENT: Senator, will you 6 yield for a question? 7 SENATOR MEIER: Yes, I will, 8 Madam President. 9 THE PRESIDENT: You may proceed, 10 Senator Krueger. 11 SENATOR LIZ KRUEGER: Thank you. 12 And so I have a chart that shows 13 that 50 percent of the 8 percent that doesn't 14 get paid out in prizes through this model 15 would go to education. 16 So if I do the math, that means for 17 $850 million to be going into education, over 18 $21 billion would be gambled using these VLT 19 machines. Is that correct? 20 SENATOR MEIER: Could you repeat 21 that question again, Senator? I'm a little 22 slow with your math. 23 SENATOR LIZ KRUEGER: Certainly. 24 I have an analysis that shows that 25 within this bill 92 percent of every dollar

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(518) 371-8910 1 bet would be paid out as prizes, leaving 2 8 percent. 3 SENATOR MEIER: Right. Let's do 4 it one piece at a time. That's correct. 5 SENATOR LIZ KRUEGER: That of 6 that 8 percent remaining, 10 percent would go 7 to the Lottery Division, there would be a 8 complex moving formula for the vendor fee and 9 also a moving formula for the vendor 10 marketing, but that approximately 50 percent 11 of that 8 percent, or 4 percent of the total, 12 would go towards education. 13 SENATOR MEIER: Yes, that's 14 correct. Approximately. 15 SENATOR LIZ KRUEGER: Thank you. 16 So if $850 million is 4 percent, 17 then 100 percent would be $21 billion, a 18 little over $21 billion actually gambled? 19 SENATOR MEIER: Approximately, 20 yes. 21 What's your point, Senator? 22 SENATOR LIZ KRUEGER: Okay. I 23 wanted to just make sure I had the numbers 24 right. Thank you. 25 Speaking on the bill, Madam

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(518) 371-8910 1 President. 2 Thank you, Mr. Sponsor Surrogate. 3 THE PRESIDENT: You may proceed 4 on the bill, Senator Krueger. 5 SENATOR LIZ KRUEGER: We passed 6 the laws to expand VLTs within harness racing 7 before I was in the Senate, so I can't say 8 that I have a record of voting for or against 9 this model. And I do understand the dilemma 10 of the constitutional question from Dalton v. 11 Pataki. 12 But I have to say, with little time 13 to look at this, should we not be asking the 14 bigger question? In addition to perhaps 15 850 million in education that we might 16 receive, that this one model -- and we're 17 talking about many models of gambling, 18 hypothetically, in New York State at this 19 point in time, casinos, other VLTs, expanded 20 lotteries -- $21 billion in gambling revenue 21 just from harness track racinos is $21 billion 22 from our economy that won't be spent in other 23 ways. 24 Because the income of our 25 constituents doesn't necessarily move with how

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(518) 371-8910 1 much they gamble, although we could argue that 2 the ones who win, their revenue moves. But 3 you're talking about making a decision just in 4 harness racing of $21 billion being spent 5 gambling in VLTs within harness racetracks, 6 which is $21 billion that constituents may not 7 have, then, for their housing or to help pay 8 for their health care or their children's 9 education. 10 And I know that Senator Padavan, in 11 fact, I think, is the leader in our Senate 12 chamber raising the concerns about the costs 13 to be paid from expanded gambling. But the 14 numbers are startling just for this one 15 proposal within harness racetracks and 16 expanding VLTs there. 17 And I know that many of my 18 colleagues disagree with me, and they argue 19 that people will go and gamble in other 20 states, they will spend that money anyway, and 21 why shouldn't the money be spent here in 22 New York State so that some of it goes into 23 education. 24 But I am uncomfortable moving 25 forward with a fix that still results in this

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(518) 371-8910 1 much money going out of the pockets of 2 New Yorkers for gambling, without any 3 information that any of the money in this bill 4 would go towards public education about some 5 of the dangers of gambling, the risks of 6 addiction from gambling, the costs to one's 7 family in losing one's money in gambling, the 8 risks associated with the odds of gambling. 9 And so I will be voting against 10 this bill today, continuing my concern that we 11 aren't asking all the questions as we move 12 forward to expand gambling in the State of 13 New York. 14 Thank you, Madam President. 15 THE PRESIDENT: Senator Spano. 16 SENATOR SPANO: Thank you, Madam 17 President. 18 I think we need to look at this 19 bill for what it is. It's a jobs bill, and 20 it's an education bill. 21 And with all due respect to Senator 22 Krueger, I think rather than flippantly 23 referring to perhaps putting $850 million into 24 education, we should recognize that 25 $850 million means a big difference in the

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(518) 371-8910 1 education of our kids all across this state. 2 Right now in Yonkers Raceway and 3 Aqueduct and harness racing across this state, 4 we've seen the decline. Yonkers Raceway right 5 now is at a dead stop as a result of that 6 court decision that we need to repair through 7 this bill or the other bill that Senator 8 Larkin is offering today. 9 We need to get VLTs moving in 10 New York State so that we can get the benefit 11 of the education money that is so necessary 12 for our school districts. 13 We do pay attention to people who 14 suffer from an addiction. And that's why we 15 have increased our funding over the years, as 16 a Senate initiative, for people who suffer 17 from compulsive gambling. And we recognize 18 that. 19 But as you said, Senator, that 20 we're taking money out of the pockets of 21 New Yorkers, I'd submit to you that the money 22 is coming out of the pockets of New Yorkers 23 already. They are gambling whether you want 24 to put blinders on or not. They're gambling 25 in Pennsylvania -- which, by the way, gives

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(518) 371-8910 1 more money to the tracks than we would here. 2 They're gambling in Atlantic City. They're 3 gambling at the Indian casinos. They're 4 playing the lottery and taking advantage of so 5 much that is there. 6 We're saying let's put in place a 7 bill that the intent of this bill is to have a 8 vendor's fee for the racetracks, a reasonable 9 and necessary marketing allowance for the 10 racetracks so that we can market what we're 11 doing at these tracks, pay attention to 12 compulsive gambling, and allow the tracks to 13 move forward to hire people in our 14 communities, to make sure that we are sharing 15 that economic base for education that will be 16 raised by -- $850 million is just a beginning 17 number of what we'll be able to raise for 18 education in this state -- and move forward 19 without delay, because we've delayed too long 20 and have seen the suffering of our communities 21 and our school districts all across the state. 22 So I am very happy to support this 23 measure, and both measures today, and hope 24 that we move forward without delay and get a 25 bill to the Governor for his signature.

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(518) 371-8910 1 ACTING PRESIDENT LITTLE: Thank 2 you. 3 Senator Sabini. 4 SENATOR SABINI: Thank you, Madam 5 President. 6 I just wanted to explain to my 7 colleagues, because that number that was 8 quoted before sounds vast -- and it is a vast 9 number, but it's not a true number. 10 Because just like you would at a 11 poker game in someone's house, the statistical 12 amount of money bet is known in the business 13 as a churn. If you put $10 into one of these 14 VLTs, you don't just play it once, you play it 15 over and over until you either win enough 16 money that you want to leave or you lose your, 17 say, theoretical $10. 18 Statistically, that $10, depending 19 on the play on the machine and the odds on the 20 machine, will churn to $170 or more. So the 21 figure that was quoted before of some 22 $20 billion or something is probably close to 23 twenty times the real number because of the 24 churn. 25 In other words, every time in a

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(518) 371-8910 1 standard, say, poker machine that we have in 2 our VLTs, the standard bet is a dollar and a 3 quarter. If you want to play for the full 4 odds, you'd play a dollar and a quarter. And 5 you put $10 in that machine, you would keep 6 playing that over and over and over. So the 7 number of $20 billion or whatever I heard was 8 that dollar and a quarter times the number of 9 hands you played. 10 That doesn't mean you're actually 11 going to lose $20 billion. It probably means 12 close to like less than a billion or around a 13 billion. Which is still a lot of money, but 14 statistically in the gaming industry, it's not 15 the amount -- the amount wagered is not the 16 amount lost. It's part of a churn of money. 17 And it's really probably about an 18th or a 18 20th of the real number. 19 So people shouldn't get alarmed at 20 the size of it. It's still a big amount of 21 money. But people that play machines just 22 don't play once -- otherwise, they wouldn't 23 drive three hours to Connecticut or Atlantic 24 City to play -- they make a day of it. And 25 the money that's churned for, say, a hundred

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(518) 371-8910 1 dollars could be well over -- your risking 2 $100 can sometimes be a churn of $10,000, even 3 though you don't realize it. 4 ACTING PRESIDENT LITTLE: Thank 5 you, Senator. 6 Senator Nozzolio. 7 SENATOR NOZZOLIO: Madam 8 President, on the bill. 9 ACTING PRESIDENT LITTLE: Thank 10 you. Senator Nozzolio, on the bill. 11 SENATOR NOZZOLIO: I had not 12 expected to rise today, but Senator Krueger's 13 comments motivated me to get up and discuss 14 something that is of a broader perspective. 15 The efforts of Senator Larkin in 16 pushing this legislation should be commended. 17 Because what this does is present, besides all 18 the other merits that have been discussed 19 today -- about education, about assistance to 20 the General Fund, about helping a variety of 21 regions of the state in economic development 22 efforts -- what needs to be also emphasized is 23 what this will do to help the horse racing 24 industry. 25 Now, the horse breeding industry is

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(518) 371-8910 1 an industry that in New York perspective is 2 one that is growing as an agricultural entity. 3 It's a key component of our agricultural 4 sector in Western New York. It employs 5 literally thousands of people who are directly 6 involved in the development of horse breeding, 7 who are tangentially involved in growing hay 8 and feed for horses, involved in the training 9 and development of horses. 10 That we a few years ago in this 11 chamber congratulated the breeders and the 12 owners of Funny Cide, a New York-bred horse 13 who won the Kentucky Derby and then went and 14 to win the Preakness. Each of us stood and 15 congratulated that accomplishment from a 16 New York-bred horse. 17 New York breeding and the New York 18 horse industry is an excellent contributor to 19 jobs in Western New York. And that for some 20 in this chamber to cavalierly say this is not 21 going to help job development I think misses 22 the mark. 23 And that if there are to be Funny 24 Cides in the future, those New York-breds who 25 succeed on the national stage of horse racing,

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(518) 371-8910 1 if we are to expand the jobs that are in this 2 industry already, you need to support this 3 legislation. If you don't, you're basically 4 saying no to those jobs for upstate New York. 5 Thank you, Madam President. 6 ACTING PRESIDENT LITTLE: Thank 7 you. 8 Senator Klein. 9 SENATOR KLEIN: On the bill, 10 Madam President. 11 ACTING PRESIDENT LITTLE: Thank 12 you. Senator Klein, on the bill. 13 SENATOR KLEIN: I too rise in 14 support of this legislation. 15 While I don't think gambling is the 16 economic wherewithal for our state, I do 17 believe we do have some good instances here 18 where it has been an economic generator. 19 Clearly Saratoga has been a success story. 20 Yonkers Raceway, which is within my Senate 21 district, is clearly on economic hard times. 22 The track no longer has a clientele. Needless 23 to say, it's become very shabby, the 24 surrounding area. 25 I think this legislation would help

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(518) 371-8910 1 get a large handle again at the racetrack. I 2 don't think we can ever go back to the 42,000 3 people that used to go to Yonkers Raceway each 4 and every night, but we can increase the 5 number of people who go. 6 I just want to take it one step 7 further, because I believe the money that goes 8 into education is important. It's an 9 important one-shot for an ailing education 10 system. 11 I would like to see, more 12 specifically, a portion of the money that 13 would be generated at Yonkers Raceway by the 14 VLTs be dedicated to the schoolkids of 15 Yonkers. I think everyone knows clearly that 16 Yonkers is on economic hard times. They have 17 a school system that is not run properly. We 18 can debate why that happened. But the bottom 19 line is we need some money to go to Yonkers 20 schoolkids now. 21 So I would support this 22 legislation, and I would hope there would be a 23 way that we can at least earmark a portion of 24 this money, not only to make sure that the 25 track survives but also getting more money for

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(518) 371-8910 1 Yonkers schoolkids. 2 ACTING PRESIDENT LITTLE: Thank 3 you, Senator. 4 Is there any other Senator wishing 5 to be heard? 6 The debate is closed. 7 The Secretary will ring the bell. 8 Read the last section. 9 THE SECRETARY: Section 6. This 10 act shall take effect immediately. 11 ACTING PRESIDENT LITTLE: Call 12 the roll. 13 (The Secretary called the roll.) 14 ACTING PRESIDENT LITTLE: Senator 15 Diaz, to explain his vote. 16 SENATOR DIAZ: Thank you, Madam 17 President. Good morning. I would like to 18 explain my vote. 19 But before I explain my vote, I 20 would like to join my colleague on the other 21 side when he wished you and all the Irish 22 people a very good day. 23 Madam President, tradition states 24 that a day like today, you've got to wear 25 green. And if you don't, you've got to be

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(518) 371-8910 1 pinched. So ladies and gentlemen, start 2 pinching. 3 (Laughter.) 4 SENATOR DIAZ: To explain my 5 vote. 6 I heard Senator Spano. He said 7 that they are gambling in New Jersey, he said 8 they are gambling in Atlantic City, he said 9 they are gambling in Pennsylvania. 10 And this is a new trend. This is a 11 new trend. Whatever the other people do, we 12 should do. They doing stem research -- 13 embryonic stem cell research in California, 14 then do it here. So whatever any other people 15 do, we should do too. 16 And gambling is dangerous. 17 Gambling takes money away from people. I 18 oppose gambling in any type, shape or form. 19 Games should be only used for recreational 20 activities. 21 So I'm voting no on this bill for 22 reasons -- not because I want to bring 23 New York to be bankrupt and I want to prevent 24 the Education Department from getting money, 25 but because gambling is not the right way to

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(518) 371-8910 1 go. 2 Thank you. 3 ACTING PRESIDENT LITTLE: Senator 4 Diaz will be recorded in the negative. 5 Senator Padavan, to explain his 6 vote. 7 SENATOR PADAVAN: Thank you, 8 Madam President. 9 I have no illusions that anything 10 I'll say now or have ever said over the last 11 several decades will have any impact 12 whatsoever. However, I think something should 13 be said. 14 This is not found money. This is 15 not new money that will go toward education in 16 a very positive way. It's money that's being 17 sucked out of the economy like a vacuum 18 cleaner. 19 If you add up all of the gambling 20 venues that we currently now have in effect -- 21 State Lottery, Quick Draw, Scratch-off, Super 22 Lotto, casinos, those that are online -- and 23 you add these new venues, these racinos, some 24 of which are already in operation, and these 25 that are being proposed today, we're talking

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(518) 371-8910 1 about $80 billion annually being wagered by 2 the people of New York State. 3 And the argument has always been 4 that they're going to gamble anyhow. And 5 that's true, in part. But what all the 6 economists and sociologists and everybody who 7 has any expertise in this area will tell you 8 is that the more readily available you make 9 gambling, the more people will gamble and the 10 more often they will gamble. 11 Which is why our State Lottery 12 spends $30 million, $40 million a year in 13 advertising. They have a monopoly. In 14 theory, they shouldn't need to advertise. But 15 they want more people to gamble more often. 16 These VLTs in Queens that you 17 referred to as economic development, Senator 18 Sabini, are going to suck money out of people 19 in that community who can least afford it. 20 Because you and I both know who lives in the 21 vicinity of Aqueduct. They're not wealthy 22 people who get on a bus or a train or in a car 23 and go to Atlantic City. But they will drive 24 to that large parking lot, which is a flea 25 market on weekends, and they will go there and

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(518) 371-8910 1 lose their money. You know it, and I know it. 2 Let's not kid ourselves. 3 If we're so concerned about 4 education dollars, why not put the VLTs right 5 in the schools? We could short-circuit the 6 whole system; take the money right out of the 7 machines and turn it over to education. Cut 8 out all the middlemen. 9 There is absolutely no 10 justification for this state now being the 11 premier state in the nation in terms of gross 12 amounts gambled and over a million people who 13 are both compulsive and problem gamblers. 14 And if you doubt me, go to a 15 meeting of Gamblers Anonymous and sit there 16 and listen, as I have done, or talk to the 17 people who are the advocates for those poor 18 souls, and find out what we have done in 19 New York State to increase that number every 20 year that I can recall, decade after decade of 21 more gambling, more ways for people to lose 22 money. 23 And each time, we come up with 24 justification: education. It's not a 25 justification. It's an excuse. Let's call it

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(518) 371-8910 1 for what it is. 2 I vote no. 3 ACTING PRESIDENT LITTLE: Senator 4 Padavan will be recorded in the negative. 5 Senator LaValle, to explain his 6 vote. 7 SENATOR LaVALLE: Madam 8 President, to explain my vote. 9 I have listened to Senator Padavan. 10 We've talked about this. And I certainly -- I 11 feel very conflicted about these bills and 12 come to a different conclusion than Senator 13 Padavan. 14 One, I have always opposed 15 gambling. I think we're going too far in this 16 state. And what is disturbing is that we 17 constantly make manipulations with our 18 constitution. The provisions are very, very 19 clear what we can do and not do. And I wonder 20 whether on some of these measures we are 21 piercing or going around constitutional 22 authority. 23 And the reason I come to a 24 different position than the Senator is that 25 that's for a court to decide, decisions and

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(518) 371-8910 1 lawsuits, constitutional challenges. 2 But I think we do have to be very, 3 very careful and go through the right 4 processes that indeed the people have an 5 opportunity to be petitioned -- to have a 6 petition and express themselves, so that our 7 constitutional authority is clear and it is 8 done through a process rather than through 9 back-door pieces. 10 It does provide more money for 11 education. We're faced with great challenges. 12 And until the courts tell us otherwise, I will 13 vote in the affirmative on this measure. 14 ACTING PRESIDENT LITTLE: Thank 15 you. Senator LaValle recorded in the 16 affirmative. 17 Senator Schneiderman. 18 SENATOR SCHNEIDERMAN: Briefly, 19 Madam President, to explain my vote. 20 I really -- my feelings are similar 21 to Senator LaValle's. I am conflicted about 22 this. I think in general I am opposed to the 23 expansion of gambling. I think it has become 24 one of the critical elements of the economic 25 development strategy for the State of New York

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(518) 371-8910 1 in the last decade, and I think that's a grave 2 error. 3 I do think that in this particular 4 case, we have institutions that have been 5 providing gambling entertainment for a long 6 time -- horse racing -- that need some help 7 and support, that do create jobs, that do 8 generate some funds for education. 9 But this is an issue that no one 10 should vote on without giving it a lot of 11 thought and without taking it very seriously. 12 And I disagree strongly with 13 Senator Padavan's -- one statement Senator 14 Padavan made, which is the assertion that it 15 has not made any difference for him to speak 16 as he has over these years. I think it's made 17 a tremendous difference. I think people take 18 this more seriously. I think it changes some 19 people's votes. 20 And there's a long, long history 21 behind us and there's a lot of years ahead of 22 us and decisions on gambling still to be made, 23 and I do think that his voice has been very 24 significant and made a difference on these 25 issues.

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(518) 371-8910 1 I will be voting for this bill, 2 Madam President. But I do so with the same 3 conflicted feelings that Senator LaValle 4 expressed. 5 Thank you. 6 ACTING PRESIDENT LITTLE: Thank 7 you. Senator Schneiderman in the affirmative. 8 The Secretary will announce the 9 results. 10 THE SECRETARY: Those recorded in 11 the negative on Calendar Number 300 are 12 Senators Diaz, L. Krueger, Padavan, Parker and 13 Serrano. 14 Those Senators absent from voting, 15 Balboni and Sampson. 16 Ayes, 50. Nays, 5. 17 ACTING PRESIDENT LITTLE: The 18 bill is passed. 19 The Secretary will read. 20 THE SECRETARY: Calendar Number 21 301, by Senator Larkin, Senate Print 3276, an 22 act to amend the Tax Law, in relation to video 23 lottery gaming. 24 ACTING PRESIDENT LITTLE: Read 25 the last section.

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(518) 371-8910 1 THE SECRETARY: Section 4. This 2 act shall take effect immediately. 3 ACTING PRESIDENT LITTLE: Call 4 the roll. 5 (The Secretary called the roll.) 6 ACTING PRESIDENT LITTLE: Senator 7 Diaz, to explain his vote. 8 SENATOR DIAZ: I'm going to vote 9 no again for this one, for the same reason. 10 But, you know, I hate to see people 11 playing God and the devil, taking the 12 opportunity to stand up and explain how wrong 13 is this and I've got concerns and this is 14 wrong, but I'm voting yes. 15 I mean, come on, stop, ladies and 16 gentlemen. Let's be somebody. I mean, let's 17 get some kind of sense on this. So stop, you 18 know, wobbling and trying to be on both sides. 19 If you want to vote yes, don't say that 20 there's anything wrong with the bill. If you 21 want to vote no, just vote no. Come on, stop 22 this thing already. 23 I'm voting no. Thank you. 24 ACTING PRESIDENT LITTLE: Senator 25 Diaz in the negative.

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(518) 371-8910 1 The Secretary will announce the 2 results. 3 THE SECRETARY: Those recorded in 4 the negative on Calendar Number 301 are 5 Senators Diaz, Duane, L. Krueger, Padavan, 6 Parker, Schneiderman and Serrano. 7 Those absent from voting are 8 Senators Balboni and Sampson. 9 Ayes, 48. Nays, 7. 10 ACTING PRESIDENT LITTLE: The 11 bill is passed. 12 Senator Skelos. 13 SENATOR SKELOS: Madam President, 14 is there any housekeeping at the desk? 15 ACTING PRESIDENT LITTLE: No, 16 there is not, Senator Skelos. 17 SENATOR SKELOS: There will be an 18 immediate meeting of the Majority in the 19 Majority Conference Room. 20 And there being no further business 21 to come before the Senate, I move we stand 22 adjourned until 3:00 p.m. Monday, March 21st, 23 intervening days being legislative days. 24 ACTING PRESIDENT LITTLE: Thank 25 you.

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(518) 371-8910 1 On motion, the Senate stands 2 adjourned until Monday, March 21st, at 3 3:00 p.m., intervening days being legislative 4 days. 5 (Whereupon, at 12:39 p.m., the 6 Senate adjourned.) 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

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