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Aqueduct Entertainment Group picked for racino

It has been eight years since lawmakers approved

It has been eight years since lawmakers approved a plan to install as many as 4,500 gambling machines at Aqueduct Racetrack. (Dec. 15, 2009) Credit: Charles Eckert

ALBANY - Gov. David A. Paterson and legislative leaders have chosen a consortium that includes several builders and a former Las Vegas casino executive to install and operate video lottery terminals at Aqueduct Racetrack in Queens.

Assembly Speaker Sheldon Silver said he agreed with the selection of Aqueduct Entertainment Group subject to conditions, including raising the upfront licensing fee from $200 million to $300 million.

The winning bid for the state-issued license for New York City's first slot machine-style "racino" beat four rival proposals on condition it raise its upfront payment.

In November, AEG said it had advised Paterson it would make an upfront payment of at least $200 million for the license fee and would open within six months of executing a memorandum of understanding.

The group didn't immediately respond to requests for comment Friday after the governor announced the decision in a statement.

Paterson said AEG had financial viability and best fulfilled the selection criteria, though all five groups under consideration had valid proposals. "AEG presented a comprehensive bid that enjoys community support and also offers strong marketing appeal," his statement said.

It has been eight years since lawmakers approved a plan to install as many as 4,500 gambling machines at the thoroughbred track, with a percentage of revenue paid to the state. The New York Racing Association, which runs the state's three thoroughbred tracks, has threatened to cancel the Belmont Stakes at Belmont Park if lawmakers don't get moving on the plan.

Paterson spokesman Morgan Hook said Friday the administration hopes to have the memorandum of understanding signed within 30 days, with the upfront payment due then.

According to AEG, its partners are the Navegante Group led by Larry J. Woolf, former chief executive of MGM Grand Hotels in Las Vegas; building contractor Greenstar Services Corp.; Turner Construction Co.; Levine Builders; the Darman Group Inc. and Empowerment Development Corp.; PS&S Design; Siemens; and merchant bank Clairvest Group Inc.

One unsuccessful bidder, Penn National, operator of 19 casinos and tracks, said it offered the highest upfront payment at $301 million.

"We were extremely shocked and dismayed by the governor's announcement given we offered over $100 million more to the state than AEG in our bid," Eric Schippers, Penn's senior vice president of public affairs, said in an e-mail. "We remain committed to this project and will await further details about the selection process before commenting further."

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