NY Reopens Bidding for Aqueduct Racetrack Slots by Joan Gralla - Reuters

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Here's the RFP...

The New York Lottery said on Tuesday it restarted its search for a video lottery terminal vendor for Aqueduct Racetrack after the previous choice was rejected amid state and federal probes.

Previously, the governor and top legislators were involved in choosing a slot-machine vendor.

But this time, the winner will be selected by a committee to be led by the Lottery director and staffed by Lottery workers and a representative of the state Division of Budget, the Lottery said in a statement.

In March, Governor David Paterson, a Democrat, said an "apolitical" method would be used to pick a new supplier after state and federal authorities began probing whether Aqueduct Entertainment Group had won the lucrative contract to assist one of Paterson's political allies, the Rev. Floyd Flake, who is a former congressman.

The slot machine probes were one of several investigations that led Paterson to quit his election bid a week after launching it.

The governor had included $300 million from the Aqueduct slots vendor in his initial budget plan, and New York needs the money now more than ever, as its deficit tops $9 billion. The new slots selection committee was given a 12-week deadline for making its recommendation to Paterson.

"All bids will be made public once a winner is selected," and the Request for Proposals will be posted on websites," the New York Lottery said in a statement.

For years, New York governors have tried and failed to offer gamblers slot machines at Aqueduct Racetrack, located in New York City's borough of Queens.

The list of previous companies that bid for the contract includes SL Green Realty Corp (SLG.N) with Seminole Hard Rock Casinos, MGM Mirage (MGM.N), Harrah's Entertainment HAMLEH.UL, Pennsylvania National, Wynn Resorts Ltd (WYNN.O), Delaware North and The Peebles Corporation, as well as the Mohegan Tribal Gaming Authority and the Victoria Racing Club, which were working with New York-based Capital Play.

No New Bids for Big A Racino by Victor G. Mimoni - The Queens Courier

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Artist’s rendering Courtesy Delaware North
It’s back to square one for bidders to operate a “Racino” gaming operation at Aqueduct Racetrack in Ozone Park. Delaware North’s plan (shown here) collapsed when they couldn’t come up with the $370 million down payment by the Tuesday, March 31 deadline.

According to a spokesperson for Governor David Paterson, recently published reports “have it all wrong” in claiming that Tuesday, March 31 was the deadline to submit new bids to operate a Video Lottery Terminal (VLT) “Racino” at Aqueduct Racetrack in Ozone Park.

The official statement reads, “The state is currently finalizing the final details of a new solicitation process.” An Albany source said “that means writing a new Memorandum of Understanding” to govern the details of the operation, and establishing a timetable for accepting bids – including a real deadline.

“We haven’t heard anything from the Governor’s office,” State Senator Joe Addabbo, whose district includes the track and its immediate environs, reportedly said on Friday, March 27, just days before the erroneous report.

“It’s all about the budget right now, understandably,” Addabbo told The Courier Sun. “But, we are very concerned about bidding on the franchise and on certain parcels of vacant land around Aqueduct.”

Addabbo said that the land deals were not to be finalized until sometime “in late May, so there’s time to look at that situation after we have budget matters resolved.”

Assemblymember Audrey Pheffer, who also represents the area, told The Courier Sun that the new bidding process would be accelerated. “I’ve been told that the time between the opening of bids and the deadline will only be three weeks.”

The authorization to operate VLT’s at racetracks operated by the New York Racing Association (NYRA) passed the legislature in 2001, just weeks after the September 11 attacks delivered a body-blow to the city’s economy.

The Governor “remains committed to bringing a VLT facility to Aqueduct, which will provide much-needed economic development to the racetrack and critical funding for both education and NYRA,” a spokesperson said.

Industry groups such as The New York Thoroughbred Breeders have suggested that the state is losing $1 million a day in lost revenue from VLT operations at Aqueduct, from “busloads of people” gaming in New Jersey and Connecticut, said the group’s president, Barry Ostrager, in published reports. “Money is being siphoned out of New York State,” he reportedly said.

According to reported figures, the Racino operation in Yonkers tendered roughly $5 million to the state’s education coffers in one recent week.

After years of wrangling, everyone thought the matter was settled last October, when Governor Paterson announced that Buffalo-based Delaware North had won the bid to operate a 4,500 VLT Racino and commercial-entertainment-hospitality complex on the sprawling grounds around the track.

Delaware North had out-bid gaming consortium Capital Play and real estate powerhouse S.L. Green, in part with the promise of a $370 million up-front payment – roughly $120 million better than the second place bid.

However, in early March, Delaware North announced that in “a changing economic landscape,” it couldn’t come up with the money by the payment deadline – March 31. Their request to parcel out payments after the beginning of the fiscal year on April 1 was rebuffed.

Nevertheless, Delaware North was allowed to submit another bid. “We couldn’t start the process all over again,” Addabbo said, “We’ll see what kind of bids are out there.”