The debate over legalizing casino gambling continues at the state Capitol. The governor has made it clear he's not happy with the idea of building full casinos where racinos currently exist. There's also discussion about putting a casino in Manhattan within the next few years. YNN's Nick Reisman has more from the Capitol.

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NEW YORK STATE -- Governor Andrew Cuomo broke the news Friday that talks with Malaysian conglomerate Genting to build a convention center and casino in Queens have stalled. While he's open to building up to seven casinos in various parts of the state save for Manhattan, the governor said he was dead set against the idea of only allowing casinos to be built where so-called racinos currently exist.

“That only the places that now have the racinos should be eligible for the casinos. I 100 percent oppose that. One hundred percent. I believe it should be an open competition where we bring in the best companies and we get the best deal for the taxpayer that we can get,” Cuomo said.

The position puts him at odds with the New York Gaming Association, which operates nine racinos around the state. Racinos provide electronic gambling machines known as video lottery terminals at racetracks and other venues , a system the governor said isn't a good bet for taxpayers.

Cuomo said, “The current racino situation is a scandal in my opinion.”

Cuomo says giving the inside track could make it difficult for New York to reap any of the revenue benefits from an expansion of gambling.

“I don't believe the racinos have any claim for primacy. I don't believe, I do not want to be in a situation where the assumption is the tracks have the casinos and now we have to figure out how to get money from them,” Cuomo said.

And while the governor remains opposed to a Manhattan casino, their site will likely become a political football if the final go-ahead on gambling is approved.

“That's, we're talking potentially two years down the road and the Legislature will be part of that process after the voters vote where the casinos will be located,” Senate Majority Leader Dean Skelos.

The Legislature this year took the first step for an expansion of gambling by passing a constitutional amendment. A new session of the Legislature must pass the same exact amendment, then it goes before the voters. The earliest New York could see expanded gambling is November of 2013.