State legislation helps Vernon Downs remain open

VERNON, N.Y. — A little over a month after filing a Worker Adjustment and Retraining Notification (WARN) Act notice with the state and announcing that the harness horse-racing track and related gaming and lodging business would close, Vernon Downs will stay open. 

That’s thanks to a newly adopted state bill providing extended tax relief to the racing and gaming venue. The legislation still required Gov. Kathy Hochul signature as of press time. 

Mid-State Raceway, Inc., which does business as Vernon Downs Casino & Hotel, filed the WARN notice in May seeking $2 million in tax relief through the restoration of a previous agent commission fee it received. That fee was contingent on Vernon Downs maintaining 90 percent of full-time equivalent workers as of 2016 staffing levels. In return, Vernon Downs received a 6.4 percent agent commission fee.

That fee is crucial to helping Vernon Downs survive, owner Jeff Gural tells CNYBJ in a June 19 interview. With the racetrack expenses, which includes a year-round stable, Vernon Downs doesn’t make money, he says. But the agent fee reduced the losses, enabling him to keep the racing and gaming venue open.

Vernon Downs has struggled, he says, since five casinos have opened in the last five years around the region. “We saw our revenue at Vernon drop from $40 million to $28 million,” he says. Five years ago, he reached out to the state for help, and the agent commission fee was the response. That fee is the portion of net winnings paid to casino operators as compensation for running a gaming facility.

“Everything was fine ... and then COVID hit,” Gural says. After being closed for a time, the Vernon Downs casino reopened in stages, but not everyone came back to work, and Gural says he had a hard time finding employees. Soon after, he received a letter from the New York State Gaming Commission that he was in violation of the agent commission fee agreement.

Gural says he was unsuccessful in pleading his case to the state and asking for the agreement to continue. In the meantime, Vernon Downs lost about $2 million last year.

“I tried again this year, and once again I was failing,” he adds. That’s when he decided the only option left was to close. The WARN notice filed in May indicated the facility would close in stages beginning in August and ending in December, ultimately putting 249 people out of work.

Gural credits the Workers United Upstate New York union, which represents Vernon Downs’ workers, with pushing the state on the matter and getting the new bills passed by both the state Senate and Assembly. He also praised Assembly members Gary Pretlow, Marianne Buttenschon, and Donna Lupardo as well as Senators Joseph Addabbo Jr., Lea Webb, and Joseph Griffo for their work on the legislation.

The new bill also includes Gural’s other racing and gaming facility, Tioga Downs, by adjusting the tax rate at Tioga to match the tax rate of other upstate casinos, and requires Gural to maintain just 70 percent of his 2016 employment levels. The bill will expire March 31, 2027 unless it is extended.

“My bill grants a waiver so the casino can rebuild by hiring laid-off union employees and making capital improvements to create additional revenue and jobs,” Addabbo, bill sponsor and chair of the state Senate Racing, Gaming, and Wagering Committee, said.

“We’re just waiting for the governor to sign it,” Gural adds in the June 19 interview.

Once that happens, Gural says he will share the wealth with employees in the form of bonuses and a 7-percent wage increase.

Vernon Downs itself is ready for more business, especially with $1 million in renovations over the past few years.

Staying open is important not only to the 249 people who work there, Gural says, but also to the community where it contributes property, school, and sales taxes.

“Vernon is a small town, and this is the lifeblood of that small town,” he says.