New York VLT Process Back on Track

The resolution of the Senate impasse helped the cause

The end of a nasty legislative coup in New York has put the process back on track for selecting a developer for the long-stalled Aqueduct racetrack casino.

The impasse created by the June 8 coup in the Senate threatened to halt the selection of a VLT operator because there was no clear leader of the 62-member chamber. The law permitting the Aqueduct casino requires the unanimous approval of the governor and the leaders of the Assembly and Senate.

“I think that the resolution of the Senate impasse is a big step forward for the Aqueduct VLTs, as it could not move forward without approval from the Senate political leader,’’ said Charles Hayward, president of the New York Racing Association.
The collapse of the month-long coup likely will have another effect: halting talk, at least for now, of a casino at Belmont racetrack.
The coup saw Republicans, with the help of two rogue Democrats, take back control of the Senate. It resulted in Sen. Pedro Espada, a Bronx Democrat, claiming the Senate president’s title. But Democrats, led by Sen. Malcolm Smith, a Queens Democrat who was elected Senate president in January, insisted the coup was illegal and that Smith was still in charge.
The dispute made it impossible then for either to sign off on any Aqueduct approval. Paychecks to senators and payment of Senate bills stopped for a brief time because Gov. David Paterson said there was no clear Senate leader. The state also risked certain litigation from one or more of the losing bidders if it were to try to select an Aqueduct casino operator with either the approval of Espada or Smith.
The GOP-led takeover ended July 9 with the flipping back of Espada to the Democrats. Had it held together, the majority leader’s post would have been held by Sen. Dean Skelos, a Long Island Republican who for more than a year has been heavily pushing to permit VLTs at Belmont. The idea has been blocked, chiefly by Assembly Speaker Sheldon Silver, on several grounds, including a fear about two NYRA-run casinos being so close to each other.
In June, the Paterson administration, which is running the Aqueduct selection process, told bidders to expect a contract for the Aqueduct casino to be awarded by Aug. 1.
Morgan Hook, a spokesman for Paterson, said the gridlock in the state Senate over the past month did not stop the internal review underway to select a casino developer. “We’ve been continuing to do our due diligence on the bidders,’’ he said.
“The impasse in the Senate didn’t really delay the decision-making, but it threatened to do so. If we’d been at an impasse another few weeks, it would have been time for (legislative) leaders to review the background material on the bidders, and one of those leaders wouldn’t have been at the table,’’ he said.
Hook said the state Lottery Division, which is examining the financial and other backgrounds of the bidders, is nearing an end to its work. He said the next phase – an evaluation of which bid actually works best financially for the state – is coming “close.” He declined to predict a specific timetable.
The state is losing $1 million a day from what it projects the casino will bring the government in revenue-sharing. The delay is also cutting into what owners and breeders thought years ago would have been a sharp rise in purses from a share of the casino proceeds.
In late June, when it told bidders to expect a decision by Aug. 1, the administration asked for a massive new batch of information from the vying entities, including dates and amounts they were proposing to make up-front payments to the state, how long before the authorized 4,500 VLTs would be operational, and opening dates for any other related developments, such as hotel and entertainment space.
Six bidders with a range of gambling, real estate development, and financial partners, include Las Vegas casino magnate Steve Wynn, Hard Rock Entertainment, Penn National Gaming, and Delaware North, are vying for the contract.
The Aqueduct casino, seen by Albany as a way to bring needed cash to the government, was first approved in the weeks after the 2001 terrorist attacks. The state’s harness tracks, as well as Finger Lakes thoroughbred track, have long since opened their VLT casinos.