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Wynn drops out as bidder for Aqueduct gaming facility

Posted: Wednesday, November 04, 2009 5:49 PM

by Paul Post

Las Vegas casino mogul Steve Wynn has stunned the New York state capital in Albany by announcing Wednesday that he’s withdrawing as a bidder for Aqueduct’s 30-year gaming contract.

The move comes five days after the state issued a letter to all six bidders, asking for an upfront payment of at least $200-million along with documentation proving that they could provide such funds within 30 days of signing a memorandum of understanding with the state.

Wynn Resorts Ltd. was considered a leading candidate to get the contract for Aqueduct’s proposed gaming facility with 4,500 video lottery terminals.

“We are confident that the state of New York will find a qualified operator to meet its needs at Aqueduct,” spokesman David Chauvin said. “We would like to thank our associates and community leaders for all of their assistance in crafting our proposal.”

Other bidders were swift to react to Wynn’s departure.

“As we near the end of the process, we feel more confident than ever that the decision will be made on merit and that we will be selected,” said Rick Matthews, spokesman for SL Green Realty Trust Corp. and its partner Hard Rock Entertainment.

The Peebles Corp. is partnered with MGM Mirage.

“Our team is prepared to start faster and finish earlier than any other bidder,” company founder R. Donohue Peebles said.

Penn National Gaming Inc. has reportedly offered the highest upfront payment, $250-million.

“Every day is something newsworthy,” Penn National Gaming Vice President Chris McErlean said. “We’re just focused on our proposal. It is surprising, obviously. Wynn had been one of the more aggressive players. It’s another interesting day in the process.”

Penn National said it has cash on hand and does not need a partner to provide financing.

“We haven’t made any decisions with regard to adjusting our bid,” McErlean said of the minimum upfront payment. “We’ll review that and see if any adjustments are necessary. We feel we’ve put in a fairly substantial bid. The cash upfront payment speaks for itself. We’ve shown the state we’re ready to finance it ourselves. We’ve been complying with the process. It’s been a very fluid one.”

Chauvin said Wynn has recently completed a major expansion of its casino resort in Macao, but is not currently involved with other gaming development projects. The Wynn Encore is the company’s signature property in Las Vegas.

Bennett Liebman is head of Albany Law School’s Racing and Wagering Law Program.
 
“It’s surprising,” he said of Wynne’s announcement, “considering that he’s the one who said all along he was willing and able and had the money to go to New York state.”

New York is facing a $3.1-billion deficit and is counting on at least $200-million from Aqueduct to balance the current year’s budget. With that issue out of the way, the state must now decide which firm can produce the most money over the remaining 29 years of the contract.

Paul Post is a New York-based Thoroughbred Times correspondent