Three firms hoping to operate a gambling franchise at Aqueduct Racetrack with 4,500 electronic slot machines submitted final bids on Tuesday.
Penn National Gaming Inc., Genting New York LLC, a subsidiary of Asia’s largest gaming company and shareholder in Empire Resorts, and a group composed of SL Green Realty Corp., Hard Rock Entertainment and Clairvest Group are vying to run a “racino” at Aqueduct with video lottery terminals. The operation would be under the purview of the state Division of Lottery.
Clairvest was a partner in Aqueduct Entertainment Group, the bidder selected in the last round to run a complex that includes 4,500 VLTs, restaurants and an entertainment venue. AEG was disqualified shortly after its selection amidst suspicions of political favoritism.
Two of the previous competitors, Delaware North Gaming & Entertainment-Saratoga Gaming and Empire City Gaming/Yonkers Raceway declined to make a final bid, citing the state’s financial demands, including a $300 million down payment, covering $25 million of the New York Racing Association’s debt and possible further taxes and fees assessed by the state.
“We have concluded that the VLT vendor procurement structure as proposed makes it impossible for us to submit a conforming proposal,” said William Bisset, president of Delaware North. “A highly unusual set of financial conditions, including the non-refundability of down payment and unpredictability of state taxation rates, caused us to reevaluate the project and ultimately decide against participation. We will continue to look for other opportunities both within the State of New York and in other markets and look forward to our continued successful relationships with the New York Lottery at other locations throughout New York.”
Further complicating the bidding process was the federal government’s ruling in June formally recognizing the Shinnecock Indians of Southampton. That paves the way for the tribe to construct a full-service, Las Vegas-style casino in the area, which would be a serious competitor to the Aqueduct gaming facility.
The Division of Lottery will now have to make its recommendations to Gov. David Paterson and the Senate and Assembly leaders at the beginning of August.
A winner is expected to be announced in August.