2010-05-14 / Top Stories

Lottery Division Deals New Aqueduct Deck

By Howard Schwach

Governor Paterson Governor Paterson In one final attempt to rid the bidding process of political tinkering, the New York State Lottery Commission has issued a Request for Proposals (RFP) to develop and operate a video gaming Racino at the aging Aqueduct Racetrack in South Ozone Park.

In a prepared statement, New York Lottery said that the evaluation of the bidders would be based on “predetermined and public criteria, and will be conducted by an evaluation committee headed by the director of the lottery and staffed by lottery personnel and a representative of the state’s Division of the Budget.”

The move to a new procedure comes in the wake of a scandal-filled politicized procedure in which the Governor and Democratic leaders of the state’s Senate and Assembly chose the politically connected Aqueduct Entertainment Group (AEG) behind closed doors and with no public input.

One of AEG’s shareholders was former Congressman Floyd Flake, a Queens Democratic power broker.

A new bidding process has begun to find a company to run the proposed Aqueduct Racetrack Racino. A new bidding process has begun to find a company to run the proposed Aqueduct Racetrack Racino. The choice of AEG to run the lucrative Racino touched off both federal and state investigations, which are ongoing.

In late March, Governor Paterson’s office withdrew its support for AEG’s plan to run 4,500 video slot machines at the Aqueduct Racetrack in Ozone Park following accusations of cronyism and a rigged bidding process.

“The Division of the Lottery has concluded that it cannot issue a gaming license to [AEG],” Paterson’s office said in a terse statement.

The statement added that the new bidding process would be “transparent and apolitical, and publically accountable.”

Officials of AEG threatened to sue Paterson and the state for taking away their right to run the Racino.

Those officials said that the decision was “without legal basis, arbitrary and capricious,” and “an abuse of discretion.”

There were four other companies that were bidding for the right to run the Racino at Aqueduct: SL Green/ Hard Rock Café; Delaware North; Penn National; and Peebles/ MGM. In addition, Las Vegas casino mogul Steve Wynn dropped out of the process. At the time, Wynn said that he was “frustrated” with the political process and many believe that he will resubmit his bid now that politics is no longer involved.

It is widely expected that the other companies would respond to the new RFP as well.

Under the new procedure, the lottery division must make its recommendations to Paterson in 12 weeks.

Officials told The Wave that the decision will be announced on August 2.

In addition, all bids must be made public once a winner is selected.

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