Aqueduct Casino Bidding Process Halted Again

Action could delay final decision on casino until new governor takes office.

A New York state judge has temporarily halted the bidding process for the Aqueduct casino project to give time to consider a lawsuit brought by a consortium that had won the casino rights in a previous bidding round.

The latest in a long line of legal, political and financial twists that the project has taken is being seen by industry insiders as another factor that could delay any final decision on the casino until the next governor takes office in January.

"It’s a good thing when the court can recognize that administrative agencies are doing screwy things," said Latif Doman, a lawyer for Aqueduct Entertainment Company, formerly known as Aqueduct Entertainment Group.

Aqueduct Entertainment beat out several other bidders last year, but then was suddenly rejected earlier this spring by the state Lottery Division on the grounds that it was not licensable for the racetrack casino. At the time, investigations had already begun by federal and state agencies into the bidding process used to select the company.

The state has subsequently started another bidding process--the fourth since the casino was first okayed by the Legislature in 2001--that has taken its own strange twists. Genting New York, a subsidiary of a large Malaysian-based casino company, is the sole remaining bidder in that process after the lottery agency tossed out two other groups for not complying with its bidding rules.

State Supreme Court Judge Barry Kramer in Schenectady County, which is home to the Lottery Division’s headquarters, issued a temporary restraining order blocking the state from continuing with the current process involving Genting. The state is vetting the company and its officials and had been expected to make a decision by early August.

But Kramer has approved Aqueduct Entertainment Company’s request for a July 23 hearing. The company is seeking to overturn the Lottery’s decision that tossed out its award this spring.

Lottery officials declined comment.

Doman said the temporary restraining order stops Lottery from its vetting process of Genting or making any final decisions. Aqueduct Entertainment--a consortium whose major investor later moved on to join another group in the bidding process--wants to be reinstated as the casino winner.

"Everything has to wait until the judge decides if the injunction is going to be made permanent," said Doman, a partner with Doman Davis LLP. He said there was "no basis" for Lottery’s decision to oust Aqueduct Entertainment.

"The court has recognized that there is a likelihood that we’re going to be successful," Doman said.

Aqueduct Entertainment has filed its litigation against the Lottery Division, as well as Gov. David Paterson and legislative leaders.