The winning bid to install 4,500 video slot machines at Aqueduct had several significant weaknesses — including a dearth of strong financing and a lack of relevant experience — that made it a questionable pick, gaming experts who examined the proposals told The Post.
One of the most glaring problems that experts found with the proposal submitted by Aqueduct Entertainment Group — a consortium led by Queens powerbroker the Rev. Floyd Flake — involved the money behind the project.
"A consortium is only as strong as its weakest link, and all the links here, with the exception of Siemens [one of AEG’s partners], lack financial firepower," said Jeff Hooke, a gaming analyst and managing director of Hooke Associates, an investment-banking firm.
"This violates a basic rule of project finance — that the principal sponsor has a majority interest and be bankable."
Of the five proposals — which were all publicly released yesterday by Gov. Paterson’s office in an effort to quell the controversy over his choice of AEG — Penn National Gaming probably had the strongest financial backing, said Hooke.
Because Aqueduct doesn’t have any nearby competition in the gaming business, the state should have considered a bidder with "more experience building and operating a large facility in an urban setting," said Hooke.
Penn National has that experience in "monopoly markets," Hooke said.
In its bid, AEG also sought to have "right of first refusal" if Belmont Park ever legalized slots like Aqueduct — a request that Hooke found inappropriate because it might make other companies wary of submitting their bids for video slots at the Belmont track, since they would likely be undercut.
Hooke did find some positives with AEG — including a thorough knowledge of the neighborhood and solid political team.
Marc Dunbar, a Florida lawyer and expert, said the main advantage he saw with AEG’s bid was the speed with which it promised to complete the task.
"Their construction résumé is solid. It appears AEG would get Aqueduct open and running," he said.
However, if the state’s goal was to open as fast as possible, Dunbar doesn’t understand why it took years to decide.
"Finding a group that can open is a dime a dozen. The real issue is, who can come in and generate money for a long period of time?" said Dunbar.
In his opinion, losing bidders Delaware North, SL Green/Hard Rock and Penn National all seemed more able to do that.