Genting Strategy To Herald New York City Casino by Scott Van Voorhis - GamblingCompliance

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Genting’s ambitious push for a full-scale casino in the heart of New York City could reshape the market for gambling across the Northeast, industry observers say.

Fresh from landing one of the most elusive deals in the US gaming industry, the Malaysian casino giant has signaled it wants to go far beyond simply installing video lottery terminals at the aging Aqueduct racetrack to build a full-scale, top shelf casino.


Genting’s strategy could reap the Asian casino behemoth some handsome rewards, putting it in position to build the first casino in the Big Apple, the largest and wealthiest city in the US.


But it’s not without risks as well. The casino giant has swiftly committed itself to a major build out in a market where a number of potential competitors are also seeking to set up shop.


Still, Genting’s planned New York gambling venue, just by virtue of its almost unmatched location, is likely to shake up the gaming market on the East Coast, biting into the profits of rival casinos from Atlantic City to Connecticut, industry observers say.


“It is definitely going to have an impact on all of the Northeast,’’ said Frank Catania, a former director of the New Jersey Division of Gaming Enforcement and now president of Catania Gaming Consultants. “It’s getting to the point where the proliferation of gaming is cannibalizing everyplace else.’’


For Genting, the timing of the Aqueduct deal could not be better, coming not long after it unveiled an aggressive US expansion plan that featured big bets on seemingly long-shot deals.


Along with the notoriously tricky Aqueduct deal, the casino giant is also backing the Mashpee Wampanoag tribe in Massachusetts and exploring plans for a tribal casino in the Catskills, a short drive from New York.


But the lightning speed with which it has nailed down a deal to redevelop the aging Queens racetrack has taken gaming industry observers by surprise, with Genting succeeding in matter of weeks where others had spent years fumbling around.


A latecomer to the Aqueduct contest, Genting threw its hat in the ring this spring after the New York Lottery took over the bidding process in the wake of the latest in a long line of development deals gone bad.


The short-lived winner, Aqueduct Entertainment Group, was stripped of the Aqueduct deal in March amid a series of state and federal corruption probes into a selection process dominated by Governor David Paterson and the state’s two top legislative leaders. The winner of a previous round of bidding, Delaware North, failed to come up with a promised, $370m up-front payment.


In fact, the hunt for an Aqueduct developer began nearly a decade ago, with New York lawmakers first authorizing video lottery terminals at the aging and financially struggling racetrack back in 2001.


For its part, Genting faced rival interest from major players who had been circling the Aqueduct deal for months or even years, including MGM, Penn National and Delaware North.


But Genting benefited when it heeded warnings by the New York Lottery not to attempt to renegotiate the terms of the Aqueduct deal set forth by the state authority.


Both Penn National and New York developer SL Green, which had teamed up with the Seminoles’ Hard Rock casino and hotel empire, were disqualified after seeking extensive revisions to the Aqueduct contract put forth by lottery executives.


Genting also submitted an extremely rich upfront payment - $380m, or more than 20 percent higher than the minimum set by the lottery.


“I think they found it very hard to believe that any group could simply live up to the conditions the state had wanted for this,’’ said Bennett Liebman, coordinator of the Racing and Gaming Law Program at Albany Law School and a board member of the New York Racing Association, of Genting’s erstwhile rivals. “They put up a lot of money.’’


Following up on its Aqueduct victory, Genting is now talking up the idea of building a full-fledged casino at Aqueduct.


While Genting, after a few final sign-offs, will have a green light to roll out more than 4,500 video slots, executives with the casino giant have told lawmakers they now want to go all the way and add table games as well.


That, however, is not likely to happen overnight, with such a move needing a series of complicated approvals by the New York Legislature.


Yet it’s a further sign that Genting plans to take full advantage of Aqueduct’s prime, New York City location, observers say. (Roughly 5.6 million people live within ten miles of the track.)


Genting plans have as many as 1,600 video lottery terminals up and running in six months at Aqueduct, with the full complement of 4,500 ready to go within a year.


Initial plans call for transforming the grandstand the old track into a ‘showcase’ that will feature a three-story atrium, restaurants and two floors of video slots. There will also be an enclosed sky-bridge linking up with a nearby subway station and shuttles to pick up gamblers arriving at the nearby John F. Kennedy Airport.


Even without table games, Genting’s giant new New York City gambling hall will cut into profits both to the south in Atlantic City and to the north in Connecticut, home to two of the world’s largest casinos, Foxwoods and Mohegan Sun, observers say.


“If you establish a class facility at Aqueduct, the real losers might be Atlantic City,” said Joe Kelly, a professor of business law at SUNY College Buffalo and a gaming industry expert.


But it is a strategy that is not without some dangers as well, with a number of competitors also eager to break into the market.


Long Island’s Shinnecock tribe is pushing ahead with plans to open a casino in the area and has looked at sites that would encroach on Aqueduct’s territory, including the nearby Belmont racetrack.


There’s also the possibility neighboring New Jersey might opt to put video slots at the Meadowlands, or that New York City’s ailing OTB parlors might be given a green light to install some machines as well, Liebman noted.


Genting’s bidding rivals Penn National and SL Green were concerned enough about potential competitors that both tried to include protective provisions in a potential Aqueduct deal. Both efforts, though, backfired, prompting lottery officials to eject the two companies from the Aqueduct competition.


Still, Genting likely has a big lead on any competitor, with a Shinnecock tribal casino likely years away.


“That is a long way off,” Catania noted.

Coming Down the Home Stretch by Bryan Yurcan - Queens Chronicle

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These renderings provided by Genting New York show a glimpse of what the company proposes to do if it is awarded the bid by the state. PHOTO COURTESY GENTING NEW YORK

We may be approaching the finish line in the state’s decade-long quest to award a bid to build a gaming and entertainment franchise at the Aqueduct Racetrack.

Tonight, July 15, Community Board 10 will host a meeting at which the remaining bidder left in the field, Genting New York, will reveal what plans it has for the Aqueduct gaming franchise.

The meeting was initially scheduled to feature proposals from three bidders, but two of them, a consortium consisting of SL Green, Hard Rock International and Clairvest Group; and Penn National Gaming, were disqualified by the New York state Division of Lottery earlier this month for not meeting the requirements put forth by Albany. Those included a $300 million, nonrefundable licensing fee due before the final contract was signed and paying off a portion of the New York Racing Association’s debt. The state said those bidders also proposed their own conditions that the lottery found unacceptable.

The disqualifications came after a previous round of bidding had awarded the project to Aqueduct Entertainment Group, which was ruled out shortly after its preliminary selection amidst suspicions of political favoritism. AEG this month filed a lawsuit against the state over its disqualification. A judge Wednesday ordered a halt to the bidding process pending a hearing July 23 on AEG’s suit [see separate story].

The lottery said that Genting New York, a subsidiary of Asia’s largest gaming company, won’t simply be declared the winner by default. It will still review Genting’s bid, and could decide not to recommend it and open up the bidding process again. The agency expects to make a decision by August.

Jay Walker, a spokesman for Genting, told the Queens Chronicle that the company sees this as a rare opportunity to gain a foothold in one of the premier markets in the world.

“This is an amazing location,” he said. “It would be the only casino within the New York City limits.”

Though much of the project involves the installation of some 4,500 video lottery terminals, which are electronic slot machines, Walker said Genting has plans to do more than just build another “racino” at Aqueduct.

“They are looking at this as creating a great entertainment destination,” he said. “They are a global tourist company.”

Genting has built large-scale projects, such as the massive Highlands resort in Kuala Lumpur, and small casinos on Norwegian Cruise Line ships, which Genting owns.

Walker said the size and scope of the Aqueduct plan would conform to how “the city and state want this to develop.”

Walker said the project is expected to provide 1,300 construction jobs, and 800 permanent jobs after it opens. He further said there are no plans to construct hotel rooms in phase one of the project.

When asked if Genting might press the state to eventually allow table games, such as poker or blackjack, at Aqueduct, Walker said the company isn’t commenting on plans that far ahead, as the bid has yet to be approved.

He did say Genting has a very forward-looking philosophy that plans, “20, 30 years down the road. They really believe in this project.”

He said if the state approves the bid one shouldn’t expect delays in construction.

“These guys know how to hustle,” he said. “They do it fast and right.”

Though Genting is a major name in the gaming industry around the world, it is a relative unknown in the U.S. The company’s only domestic involvement in the industry was providing seed money for the Foxwoods resort and casino in Connecticut, and helping fund projects headed by the Seneca Indian tribe in upstate New York.

Pols: Go-Go a No-Go for Aqueduct Casino by Brendan Scott in Albany and Carl Campanile in NY - NYPOST.com

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Lose the showgirls and hold on to your horses!

Queens leaders said yesterday they want to scratch a plan to have scantily clad Las Vegas-style dancers performing at a proposed casino at Aqueduct Racetrack, while an upstate judge ordered the Paterson administration to halt its latest efforts to open a gambling facility there.

Genting New York -- the American arm of the Malaysian-based gambling giant -- unveiled images on Monday of a proposed "racino" that includes a stage for showgirls to strut their stuff while gamblers play video lottery terminals.

"That's not the type of venue we're looking for," said Community Board 10 Chairwoman Betty Braton.

Assemblywoman Audrey Pheffer (D-Ozone Park) said having showgirls at Aqueduct "went over like a lead balloon."

"That was a mistake. I'm not for scantily clothed dancers. This is not Las Vegas!" Pheffer said.

The furor over the showgirls comes as Genting presents its racino plan to Community Board 10 tonight at Aqueduct.

Genting is the only horse left in the race after the state Lottery Division disqualified two other bidders last week -- SL Green-Hard Rock and Penn National -- for not following competition rules.

After hearing about the flak, Genting NY will now tell CB 10 that the plan for showgirls is not leaving the starting gate.

"We have no plans for showgirls. This was an architect's rendering, and nothing more," said Genting spokesman Stefan Friedman.

While widely respected in the gambling industry, Genting is not without controversy.

The outfit has plunked $200 million into its partnership with MGM Mirage. New Jersey gambling regulators warned Las-Vegas-based MGM Mirage to drop its ties to business partner Pansy Ho, the daughter of Macao gambling mogul Stanley Ho, who has reputed ties to organized crime.

But the Genting-backed MGM decided to sell its stake in Atlantic City's posh Borgata casino instead of severing its business partnership with Ho in a Macao casino.

Genting dismissed the connection as trivial.

"That's like holding a bank responsible for the actions of anyone they lend money to. It just doesn't make sense," Friedman said.

Meanwhile, Schenectady Supreme Court Justice Barry Kramer issued the temporary restraining order on the 2-month-old bid process after a lawsuit was filed by the Aqueduct Entertainment Co., whose previous winning bid for the multibillion-dollar casino deal collapsed in scandal earlier this year.

Additional reporting by Jennifer Fermino

Aqueduct 'Racino' Builder Would Lure Met and "Jet" Fans - NYPOST.com 

The would-be builder of a video-slots complex at Aqueduct Racetrack in Queens announced plans last night to lure JFK Airport passengers on layover and Mets fans from Citi Field with shuttle buses.

Genting New York exec Jay Walker called JFK a massive tourism hub whose stop-over passengers could duck into the racino for a couple of hours.
Walker also called Mets fans "a diverse group, and they look like our customer base."

Swanky Plans for Aqueduct by Jennifer Fermino - NYPOST.com

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The only horse left in the race to win the multimillion dollar Aqueduct contract has revealed its ambitious design for the racetrack -- a 400,000-square-foot space that includes a high-end restaurant, an event center and even a stage for scantily clad showgirls.

The plans from Genting New York -- the American arm of a megabucks Asian gaming conglomerate -- call for an upscale Chinese restaurant and a football-field-sized space for social functions and corporate events.

Visitors will also get an eyeful of dancing showgirls while they hit the video slots, thanks to a stage set up behind the machines. The company claims it will be prepared to open the new racino -- featuring 4,500 video slot machines -- a mere six months after getting the OK from the state.

SKIN CITY A proposed redesign of Aqueduct would allow gamblers to ogle showgirls while playing the slots.

The plans submitted as part of the bid -- the only one left after Penn National and the SL Green-Hard Rock partnership were disqualified for not following competition rules -- also include a food court with 450 seats, an outdoor terrace and a 2,200-car parking garage.

The Asian gambling giant is one of the largest casino companies in the world, but has a pretty puny presence in the US.

It's hoping that Aqueduct will change that -- if it comes out on top of what has become one of the most bedeviled bidding wars ever.

Aqueduct Entertainment Group, the consortium that won the previous round of bidding despite being deemed "unlicensable," is now being probed following accusations that it rigged the procedure.

If Genting's bid comes up snake eyes, the state will have to start the entire process over, further delaying the already decade-old uphill battle.

Spurned Aqueduct Winner Sues to Get its Job Back by Amanda Fung - Crain's New York Business

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Here comes AEG again, asking a state judge to let it sue the governor and other state politicos and win back the license to turn the Queens race track into a gambling mecca.

A consortium of bidders that won and then lost a contest to develop a racino at the Aqueduct horse track in Queens wants to sue the state and win the job back.

Aqueduct Entertainment Group has asked a state Supreme Court judge for permission to sue the New York State Division of Lottery and other elected officials, including Gov. David Paterson. A decision from the judge could come as soon as Tuesday.

AEG, which earlier this year had won the previous round of bidding to operate and develop an Aqueduct racino, was subsequently denied a gaming license and a new bidding process was launched by the Lottery Division two months ago.
AEG and its chairman, Richard Mays, in their court filing cite “injury they presently suffer as a result of the arbitrary, capricious, unauthorized and discriminatory actions taken against them by Lottery, Gov. David Paterson, Senate President Malcolm Smith and Assembly Speaker Sheldon Silver.”

A Lottery Division spokeswoman declined to comment, noting that the Lottery Division has not been served. “We have not seen the lawsuit,” she said.

“We seek a temporary restraining order until we have a hearing or trial,” said Daryl Davis, a partner at Doman Davis, the law firm representing AEG. “We did the research, our claims are valid, and I expect the judge to grant our application.”

The lawsuit was filed with the state Supreme Court in Schenectady County and claims that the gambling license rules were changed after AEG was selected as the winner of the lucrative Aqueduct contract. Therefore the Lottery Division's decision to declare AEG ineligible for a gaming license had “no rational basis, was arbitrary and capricious, and was an abuse of discretion.”

Separately, the botched AEG selection is still under investigation by the state's inspector general office. However, AEG's attorney and the court filing claim: “Absolutely no one associated with AEG has been accused of any wrongdoing since they did nothing improper.”

Meanwhile, the Lottery Division is expected to recommend a new winning bid on Aug. 3. Last week, the Lottery Division disqualified SL Green and Penn National Gaming, formerly seen as frontrunners in winning the latest bid. The disqualifications left one bidder, Genting New York, a relatively unknown entity that is part of a giant Malaysian company which operates casinos across the country, to win the race. Genting's proposal is still being vetted by the Lottery Division.

If the judge rules in favor of AEG, the latest contest could well be halted. AEG filed the suit so it can move forward with its plans to build the Aqueduct facility, said Mr. Davis, adding that the company will also pay the $300 million upfront licensing fee that it was required to pay in the earlier contract.

“They are asking to be restored as the rightful contract winner; they want to break ground and do what they were ordered to do,” he said. “The opportunity was unlawfully taken away from them.”

New York Rejects Two Aqueduct Bidders; Genting Malaysia Remains by Michael Quint - BusinessWeek

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Genting Malaysia Bhd., owner of casinos in Singapore, the Philippines and the U.K., is the only surviving bidder for an electronic slot-machine parlor at New York City's Aqueduct Racetrack after two U.S.-based firms were disqualified, the New York Lottery announced.

One excluded proposal was submitted by a group led by SL Green Realty Corp., Manhattan's biggest office landlord, in a bid with partners Hard Rock International and Toronto-based Clairvest Group. The other was from Wyomissing, Pennsylvania- based Penn National Gaming Inc., which operates 19 casinos and racetracks.

“The proposals did not conform with the requirements of the competition and, instead, attempted to negotiate for terms more favorable to the bidders,” Lottery Director Gordon Medenica said in a statement. Neither New York-based SL Green nor Penn National will be eligible for reconsideration even if Genting isn't approved, he said.

The project, called a racino, would include more than 4,000 video slot machines plus a hotel and other facilities located at the racetrack for thoroughbred horses in the New York City borough of Queens. The developer of the project, which has been planned for nine years, would pay a minimum $300 million up- front fee to the state, which would issue $250 million of bonds to help finance the facility, according to budget documents.

Lottery Evaluation

The Lottery's evaluation of Genting's bid will continue, and it is not guaranteed the award, even though it is the only remaining bidder, said Jennifer Given, a state spokeswoman. The Lottery expects to announce its recommendation by Aug. 3, she said. The winner must also be approved by the governor, the president of the state Senate and the speaker of the Assembly.

The Lottery's announcement listed 19 aspects of the SL Green proposal that were called “non-responsive” by the Lottery. The Penn National proposal was disqualified on eight counts.

Genting Malaysia, based in Kuala Lumpur, said July 1 it will buy the U.K. casino businesses of Genting Singapore Plc for 340 million pounds ($510 million) to expand overseas. Both companies are controlled by Genting Bhd., which has holdings in hotels, palm oil plantations and cruise lines.

Spokesmen for SL Green and Penn National couldn't be reached for comment.

Two Aqueduct Bidders Scratched From Consideration for VLTs by Howard Koplowitz > YourNabeyour.com

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Two of the three bidders for the video lottery terminal contract at Aqueduct Race Track were disqualified from consideration Tuesday for being “non-responsive” to the request for proposals that outlines how the bidding process will work, the state Lottery Division announced.

The bid from a group comprised of SL Green, Hard Rock International and Clairvest Group and the proposal from Penn National Gaming were thrown out because the plans “did not conform with the requirements of the competition and instead, attempted to negotiate for terms more favorable to the bidders,” according to the Lottery.

That leaves the proposal from Genting NY LLC, a subsidiary of a Malaysian-based gaming and hospitality company, as the only remaining bid for the Lottery to consider.

The state has until Aug. 3 to decide whether it will award the VLT contract to Genting.

A Lottery spokeswoman said that although Genting still is in the ring, the division can choose to pick no one for the contract and rebid.

If Genting is not approved, the Lottery said neither the SL Green-led group nor Penn National would be eligible for reconsideration because it would be unfair to other groups that showed preliminary interest in the contract but declined to submit a bid.

Instead of submitting signed copies of the memorandum of understanding attached to the RFP, both SL Green/Hard Rock/Clairvest and Penn National “offered altered versions of the MOU (memorandum of understanding) containing ‘material deviations,’” the Lottery said.

The division said the SL Green-led proposal was “non-responsive to the RFP on a number of substantial issues” and listed 19 points as to why the group was disqualified.

Among them were SL Green’s failure to agree to provide interim funding for New York Racing Association operations while the VLTs were to be built. It also demanded that the minimum $300 million licensing fee the winning bidder must pay to the state be held in escrow “and released to the state only after the satisfaction of conditions defined by SL Green,” the Lottery said.

The SL Green-led group also wanted to be exempt from state and local sales taxes in connection with the construction of the VLTs, the division said.

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Penn National was “non-responsive” to the RFP as well, the Lottery said.

Among the company’s demands were that it be able to terminate the VLT license on its own at any time if the casino was not profitable for four consecutive calendar quarters, the Lottery said.

Like SL Green, Penn National also wanted the minimum $300 million licensing fee to be held in escrow until conditions it stipulated were satisfied, the division said.

Genting New York Only Aqueduct Bidder Left After Lottery DQ's Other Firms by Ken Lovett - NY Daily News

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In a stunning move, the State Lottery has disqualified two of the three bidders for the ill-fated Aqueduct “racino” project.

SL Green and Penn National Gaming were rejected only seven days after submitting their applications in the latest round of bidding for the long-delayed project.

That leaves just Genting New York in the running.

Genting “appears to conform with all requirements of the bid submission process and will continue to be evaluated,” the Lottery said in a statement.

If Genting ultimately is not approved for the Aqueduct project, the bidding process will have to start again. A recommendation from Lottery is due to Gov. Paterson and legislative leaders by Aug. 3.

Lottery officials said Penn National and SL Green, which was partnering with Hard Rock International and Clairvest Group, did not conform with the set criteria. Both failed to submit signed copies of the mandatory bid requirements.

Instead, the two bidders offered “altered versions” containing numerous changes they wanted.

Once believed to be a front-runner, SL Green, for example, wanted their minimum $300 million upfront fee to be held in escrow until their conditions were met by the state.


The group also wanted the right to make ownership changes without the state’s consent, a cap on any increase in local property taxes at 3%, and a complete exemption of state and local sales taxes for the construction of the racino.

Penn National, meanwhile, wanted to be able to terminate its Aqueduct video lottery license any time it decides the casino has not been profitable for four straight quarters.


The group also wanted a guarantee that no other gaming facility would open within 50 miles of Aqeuduct, despite those who are eying Belmont in the future.

Most of the changes sought by both groups were raised with Lottery before the bids were due.

“It was made clear that non-conforming bids would be disqualified,” Lottery said.

Three Groups Pony Up Bids For Aqueduct Racino Project by Celeste Katz - The Daily Politics - NY Daily News

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Three entities submitted bids in the latest attempt to find an operator for the long-delayed and controversial Aqueduct racetrack “racino” project, Bureau Chief Ken Lovett reports here at the State Capitol:

Penn National Gaming, Genting New York, and S.L.Green all delivered their materials to the state Lottery division by the 4 p.m. deadline.

Genting is Asia’s largest casino operator.

Penn National, which offered the state the largest upfront payment the last time around, operates 19 gaming and racing facilities.

S.L. Green has again teamed up with Hard Rock International. But this time they also added Clairvest, which was part of the ill-fated Aqueduct Entertainment Group consortium that was selected and then rejected earlier this year.

Each entity was required to promise the state a minimum upfront payment of $300 million, though Lottery won’t open the sealed bids until after the vetting process. Just to compete, the groups had to make a $1 million non-refundable payment to to the state.

Several interested groups ultimately backed off, including Buffalo-based Delaware North, which was once selected to run the project but then couldn’t come up with the promised upfront money.

“A highly unusual set of financial conditions, including the non-refundability of down payment and unpredictability of state taxation rates, caused us to re-evaluate,” said Delaware North President William Bissett.

The winning bidder will have to pay the New York Racing Association $2 million per month before the racino opens while also assuming payment of a $25 million loan to the group.

The Lottery on Aug. 3 is due to recommend a selection to Gov. Paterson and legislative leaders, who have the final say.

Unlike the last process, which is now under investigation, no lobbying is permitted by the groups. The new process is modeled after standard state procurement rules.

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.

Best Bet for Aqueduct Jobs? by Howard Koplowitz - YourNabe.com

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Minority and Women Biz Got Better Guarantees from AEG Competitors

Aqueduct Entertainment Group, the consortium selected to install video lottery terminals at Aqueduct Race Track before it was deemed unlicensable by the state Lottery Division, may not have been the best firm in terms of creating jobs for minorities. Photo by Christina Santucci

Southeast Queens leaders strongly backed Aqueduct Entertainment Group’s bid to install 4,500 video lottery terminals at Aqueduct Race Track, but the consortium may not have had the best plan to benefit minorities.

AEG was selected by Gov. David Paterson, state Sen. John Sampson (D-Brooklyn) and state Assembly Speaker Sheldon Silver (D-Manhattan) for the VLT contract in January, but the group was deemed unlicensable in March by the state Lottery Division.

AEG came under scrutiny because of the stake, however small, held by Rev. Floyd Flake of the Allen A.M.E. Cathedral in Jamaica. He met with Paterson three days after AEG was selected for the VLT contract, which sparked speculation the governor may have chosen the group to gain the politically powerful minister’s support for election against .

But Paterson wound up dropping his bid for governor.

Flake withdrew from AEG after he was put in the media spotlight, saying it had become a distraction from his other interests.

Paterson released documents submitted by AEG and the four other bidders for the VLT contract in February, including each of the group’s plans for participation in the project by firms owned by minorities and women.

AEG’s documents showed it would hire no less than 20 percent of minority or women-owned contractors or subcontractors for the development of the VLT facility.

The group defined development as the design, pre-construction and operation/maintenance phases of the VLT project. The consortium also said it would have an overall goal of 25 percent minority and female-owned businesses participating in the construction of the facility.

A minority-owned business is a firm where at least 51 percent of the company is owned by a minority and a women-owned business is the same concept with at least 51 percent owned by women.

AEG and the four other firms did not break down exactly what percent of minority-owned businesses and women-owned businesses they would hire, but The Opportunity, a newspaper distributed in southeast Queens, said AEG pledged that 20 percent of construction contracts would go to minority businesses and 10 percent would go to women-owned businesses.

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AEG could not be reached to verify the paper’s numbers.

While every bidder outlined minority- and women-owned business participation in either the development or construction phases of the contract, only one group, Delaware North, specified how many permanent jobs would go to minorities once the VLTs were installed.

Delaware North said its goal was to hire 330 minorities for the more than 1,000 permanent jobs that would be available at Aqueduct.

Of the tradesmen, laborers and contractors hired to develop the project, Delaware North said 27 percent of those jobs would go to women “and members of minority communities and other disadvantaged groups.”

Bidder SL Green, which partnered with Hard Rock Entertainment for its Aqueduct proposal, said 20 percent of the contractor and subcontractors hired for the development and operation of the VLTs would be from minority and women-owned businesses while 25 percent would be hired for the construction of the facility.

Aqueduct Gaming Investors, a group led by R. Donohue Peebles, a Florida-based black entrepreneurial real estate developer, said 40 percent of jobs for the project would go to minority- or women-owned businesses.

Bidder Penn National Gaming did not specify its plan for minority and women participation in the VLT project. It only submitted plans of a casino it is developing in Pennsylvania as an example, but the documents did not specify a percentage of minority- and women-owned businesses involved in the project.

Bidders Anxious For Racino Action by Dave Lucas- WAMC Public Radio...

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Bidders for the rights to build and operate a racino at Aqueduct Racetrack have increased money they're prepared to offer state... Capital District Bureau Chief Dave Lucas reports.

The Paterson Administration has been accepting bids on an Aqueduct Racino that would house 4500 video lottery terminals, making the Queens Raceway the home of the largest slot parlor in the world. The state hopes it can make $1 million a day in revenue once the Aqueduct racino opens.

The on again off again racino project has been stymied by the economy: bidders have already amended financial aspects of their proposals and final amendments are due Wednesday. Buffalo-based Delaware North had secured the rights to build and develop the racino but backed away in March, unable to come up with enough cash for the upfront fee. Competitors have announced aggressive plans to get the project underway: SL Green's plan calls for a huge food court, a Hard Rock memorabilia bar, retail outlets and other amenities. Aqueduct Entertainment Group has promised the state $151 Million upfront - AEG spokesman Larry Roman says his company is "shovel ready" - AEG is dangling another $100 million before the state IF it will allow 10-thousand VLTS on the premises.

A spokesman for Governor David Paterson's office returned a request for comment by email, stating each bidder was met with individually during the last week of July, and all bids are under review. Once those final reviews are complete, that info will be sent to the governor and leaders for a final decision.

Crain's New York identified the top three bidders: according to the website SL Green bid $250 million, the Aqueduct Entertainment Group bid $151 million and casino mogul Steven Wynn bid $75 million.

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.”