Three Bidders Now Pursuing Aqueduct Casino

Three Bidders Now Pursuing Aqueduct Casino
Photo: File Photo

Three bidding groups have emerged and made formal offers June 29 to the state of New York to run the Aqueduct casino project.

State Lottery Division officials said the three groups meeting a 4 p.m. EDT deadline are Genting New York LLC, which is tied to a Malaysian casino operator; Penn National Gaming, which has tried before to win the Aqueduct contract; and a consortium that includes SL Green, a Manhattan real estate developer, Hard Rock Entertainment, and Clairvest Group.

Dropping out of the bidding, after earlier submitting a $1 million refundable deposit to be a part of the initial process, were Buffalo-based Delaware North and Empire City Casino/Yonkers Raceway.

The submissions, which were not made public, include a guarantee by each that they will pay the state at least $300 million in an upfront franchise fee payment if they are selected.

The winner gets the exclusive rights to run the Aqueduct casino, which would be the only casino in New York City. The casino has been approved for at least 4,500 slot machines.

The bidders include, with the exception of Genting New York, a selection of groups that had, in various forms, bid previously on the Aqueduct casino. The fourth bidding process is underway by the third gubernatorial administration in New York since the casino was approved back in 2001.

Clairvest, a Canadian bank, had been the major financial backer of Aqueduct Entertainment Group, which was awarded the casino before the state earlier this year pulled back on the deal. (State and federal probes are underway into the process by which state officials selected AEG.)

In the new submission, Clairvest joins with SL Green and Hard Rock, the casino and entertainment company owned by the Seminole Indian tribe.

SL Green said of its bid that it has been "consistent in our strong interest in the Aqueduct VLT franchise, and in taking a lead role in the economic rebound of the local community.'' The group said it is fully capitalized and with Hard Rock "stand ready to deliver maximum revenue to the state of New York.''

Penn National tried and lost in the most recent bidding round. Genting New York is a wholly owned subsidiary of Genting Malaysia, which has casinos in Australia, the Philippines, and Great Britain.

Delaware North cited a number of “risks” for not proceeding with the bid. The company was worried about paying a non-refundable $300 million payment to the state—even if final negotiations for a memorandum of understanding broke down.

Moreover, a state budget bill expected to pass today in Albany will lower the payments that vendors receive at racetrack casinos across the state by at least one percent—as a way for the state to keep more of the proceeds. Such a move is worrisome, Delaware North believes, for an Aqueduct contract that will span 30 years.

Delaware North is also not confident the state will be able to do a $250 million borrowing to help the winning bidder construct the casino, and is concerned that statutory payments to the New York Racing Association from the vendor could rise in the years ahead given NYRA’s financial troubles.

Also, all the vendors are concerned, sources said, about recent talk by the Shinnecock Tribe on Long Island to try to build a casino in the region, possibly just a dozen miles away at Belmont Park—a move that would dilute the business of any casino at Aqueduct.

Gov. David Paterson has since begun what is now the fourth bidding process over the years for the casino. The “expedited” process is more transparent, includes specific scoring benchmarks for bidders unlike the more mushy ways of the previous bidding process, and has set deadlines for decisions.

A decision on a winning bidder is expected in early August.
 

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