NEWS
State review of Aqueduct gaming bidders now complete
Posted: Thursday, July 17, 2008 11:58 AM
by Paul Post
The New York state Lottery Division has completed its review of the organizations seeking Aqueduct’s gaming contract and its report, following review by the state Inspector General’s office, should be in Governor David Paterson’s hands by Monday.
Although not certain by any means, this could signal that state leaders finally are ready to select a gaming operator to run Aqueduct’s proposed 4,500-machine video lottery terminal facility.
The proposed facility is expected to generate at least $450-million per year that would provide major new revenue streams for the New York Racing Association, horsemen, breeders, and capital improvements at all three NYRA tracks—Aqueduct, Belmont Park, and Saratoga Race Course. Racino construction is expected to take at least a year to complete, meaning it could become operational by late 2009.
“The Lottery is done,” Paterson spokesman Morgan Hook said on Wednesday. “All the applicants are qualified.”
Entities seeking the contract are New York-based Delaware North Companies; Manhattan-based S.L. Green Realty Trust and Hard Rock Entertainment; and Capital Play Inc., partnered with Mohegan Sun casino of Connecticut, Extell Development, and Plainfield Asset Management.
Former Capital Play Chief Executive Officer Karl O’Farrell was not qualified because he recently stepped down, concerned that his foreign national status was delaying the vetting process.
“He was not considered because he left,” Hook said. “There was no need to qualify him. All other parties are qualified to receive a VLT license.”
The selection requires approval of Paterson, Senate Majority Leader Dean Skelos (R-Long Island) and Assembly Speaker Sheldon Silver (D-Manhattan).
The decision has been slowed, at least in part, by recent changes in state leadership.
Paterson replaced disgraced former Governor Eliot Spitzer early this spring. Last month, Skelos replaced former Senate Majority Leader Joseph L. Bruno (R-Brunswick), who is not seeking re-election and has decided to leave office effective on Friday.
"We lose $1-million every day they [VLTs] aren’t operating,” Bruno said on Wednesday during his last official visit to Saratoga Springs, the home of Saratoga Race Course. “If that had been up five years ago we’d be $2.5-billion better off in this state. I thought six weeks ago that it was pretty well concluded. It ought to get done."
The gaming operator’s selection is closely tied to NYRA’s efforts to get out of bankruptcy. NYRA and whichever group is chosen must reach a joint lease agreement with the state to run Aqueduct. That cannot be done until the gaming operator is decided because each bidder has a different racino plan.
Bruno said that VLT revenue needs to start flowing to relieve NYRA’s financial burden. NYRA has been in bankruptcy since November 2, 2006 and President and Chief Executive Officer Charles Hayward has said the organization may need further state assistance if bankruptcy is not resolved by September, shortly after the upcoming Saratoga meeting that begins on Wednesday.
Paul Post is a New York-based Thoroughbred Times correspondent
