New York’s long-awaited selection of an Aqueduct gaming operator finally is over.
Gov. David Paterson announced on Friday that Aqueduct Entertainment Group has been awarded the 30-year contract to operate the downstate track’s 4,500 video lottery terminals.
The facility is expected to provide millions in new tax revenue to the cash-strapped state and give New York’s Thoroughbred industry a major boost. Most importantly, Friday’s decision should prevent any threat of a racing shutdown because AEG is obligated to give the New York Racing Association funds to continue operating until the racino comes online.
“AEG has both the financial viability and ability to pay the required upfront licensing fee,” Paterson said. “AEG complied with every request made during the review process and addressed satisfactorily all matters related to licensing ability.
“All of the groups have valid proposals, but AEG presented a comprehensive bid that enjoys community support and also offers strong marketing appeal.”
NYRA is scheduled to get 7% of racino revenues—4% for capital improvements and 3% for operations. NYRA already has announced plans for $100-million worth of improvements at aging Saratoga Race Course, which could produce significant local construction during the next few years.
Priorities include new restaurants, new backstretch worker dorms, and major infrastructure overhauls in the grandstand such as plumbing, electrical work.
NYRA President and Chief Executive Officer Charles Hayward could not immediately be reached for comment.
Plans call for 3,000 VLTs within six months of AEG’s signing a memorandum of understanding with the state, AEG spokesman Davis Hodge said. The remaining 1,500 machines would become operational within a year’s time.
Larry Woolf, former head of MGM Grand Hotel in Las Vegas, is one of AEG’s lead partners. He currently is head of the Navegante Group that runs Casino Niagara in Niagara Falls, Ontario.
Other members of the AEG group coalition are GreenStar Services Corp., Turner Construction Co., Levine Builders, The Darman Group Inc. and Empowerment Development Corp., PS&S Design, Siemens AG, and Clairvest Group Inc.
Paterson’s budget called for a minimum upfront payment to the state of at least $200-million from the winning bidder. However, Assembly Speaker Sheldon Silver (D-Manhattan) said Friday he would only support Paterson’s selection if the upfront payment is increased to $300-million.
AEG could not immediately be reached for comment to see if it could provide the extra $100-million.
AEG entity was one of five gruops competing for the gaming contract. Others were Delaware North Companies partnered with Saratoga Gaming & Raceway, The Peebles Corp. and MGM; SL Green Realty Trust/Hard Rock Entertainment and Penn National Gaming.
Trainer Linda Rice hailed Friday’s announcement as a step in the right direction for New York racing. Many breeders have left New York for Pennsylvania, attracted to that state’s higher purses fueled by lucrative new casinos.
“I’m delighted that we can at least move forward,” she said. “I’m relieved to hear they’ve finally named someone. We’ve been waiting too long already. Hopefully we can regroup and pull things back together.”
However, prominent Saratoga Springs horseman Jack Knowlton said, “Given the history of this, it may not be over yet.”
Penn National on Wednesday blasted Paterson and charged the state with changing the selection process rules in midstream. Penn National was the apparent high bidder with a $301-million upfront offer. Some observers have speculated that one or more groups might sue the state.