Negotiators for Suffolk Downs walked out of a casino bargaining session with city officials last week, and the two sides — long considered allies in the gambling development — remain “miles apart” on how much money a casino at the East Boston track should pay to the city, according to two people with knowledge of the negotiations.

The pact is an essential part of the application process, and must be completed at least 60 days before the casino proposal can go before the voters in a legally required referendum.

Suffolk Downs and its partner, Caesars Entertainment, have been working on their
$1 billion resort casino plan for years, and talks with the city date back many months. The extended negotiations are now allowing another competitor, Las Vegas developer Steve Wynn, to leapfrog Suffolk Downs in the state’s lengthy application process.

Wynn, who is proposing a hotel casino on the Mystic River waterfront in Everett, confirmed he was interested in the property last November, and signed a deal with Everett in April that will pay the city about $25 million a year. Everett residents will vote on the project June 22, the first commercial casino proposal to go to the ballot since the state legalized casino gambling in late 2011.

Chip Tuttle, Suffolk Downs’ chief operating officer, did not comment on negotiators walking out of a session, but objected to any characterization that the developers and the City of Boston are dramatically far from a deal. The two people who provided the information were privy to the negotiations but requested anonymity because of the sensitivity of the talks.

“Suffolk Downs has made a commitment to work closely with both Boston and Revere throughout this process, including many community meetings, traffic, environmental and economic development studies, and weeks of discussion on host community agreements,” Tuttle said by e-mail.

“We will continue to meet with city officials to finish agreements that will serve the needs of the people of Boston. We’ve made substantial progress and look forward to continuing our work with the mayor and his team.”

Mayor Thomas M. Menino has enthusiastically endorsed a casino resort at the racetrack, and his support has long been considered a major boost to the track’s application.

But the dispute over how much Boston should receive in payments is not the first sharp disagreement to arise in talks between the city and Suffolk Downs. Last August, Menino objected to plans by Suffolk Downs to develop its resort in phases, with slot machines, table games, and restaurant service coming first and resort-style amenities to follow. The mayor said at the time he would not support a phased project.

Menino on Tuesday did not back down from the city’s bargaining position. “The mayor’s priority has always been and always will be what’s best for the city,” said Menino’s spokeswoman, Dot Joyce. “This project has always been about jobs and economic development and he will continue to have his team fight for the best deal possible.”

State law requires each casino applicant to reach a deal with officials from the city or town where the project would be located, known as a host community agreement. The pacts spell out the terms by which the community would accept a development, including payments to offset any negative effects of the project, such as traffic, and any other sweeteners the developer is willing to include to win support. Municipal executives can stonewall casino proposals indefinitely by refusing to negotiate, as town boards in Foxborough and Boxborough have done.

Suffolk Downs straddles the Boston-Revere city line, requiring the thoroughbred track to negotiate host agreements with both cities, and the project must be approved by referendum votes in both communities. The track’s negotiations with Revere are complete, according to a person with knowledge of the talks.

Suffolk Downs, once the runaway front-runner and only legitimate contender for the single Greater Boston resort casino license, is now in a three-way race for the license with Wynn and Foxwoods Resort Casino, which has joined a casino venture in suburban Milford and on Monday released new renderings of the proposal.

The state gambling commission is expected to choose the winner in early 2014. The commission has set a Dec. 31 deadline for final applications, including referendum votes, to be complete.