2010-05-21 / Top Stories

Bidders Unsure About Competing For Aqueduct Racino

By Howard Schwach

Given the past political nature of the process, several bidders who waded into past bidding for the chance to run the lucrative gambling Racino at Aqueduct Racetrack are queasy about jumping into the water for a fifth time.

More than 120 questions regarding the request for proposal, which was issued last week by New York Lottery, were submitted from five different entities ahead of the Tuesday afternoon deadline, according to a spokeswoman for the Lottery Division.

The division, which oversees eight casinos statewide, declined to disclose the identities of the interested bidders. But one of the four losing bidders from the previous round, Penn National Gaming, admitted to Crain’s that it had submitted questions.

“We’re awaiting additional information prior to deciding whether or not to participate,” Eric Schippers, senior vice president of public affairs at Penn National, told Crain’s.

The three other losing bidders were Manhattan’s largest commercial landlord — SL Green; Delaware North’s Aqueduct Gaming; and The Peebles Corp., which teamed up with MGM Mirage.

The Peebles Corp., Delaware North and SL Green all declined to comment for the Crains’ story.

According to the new RFP, bidders must submit a refundable $1 million entry fee by June 1 to participate in the bidding. All proposals are due by June 29 and bidders are required to make a minimum $300 million upfront payment.

The Lottery Division will score bidders and then present recommendations to Governor David Paterson and legislative leaders for final approval.

Unlike the previous round, however, sources say Paterson will be bound by Lottery’s pick this time around.

Under present state law, Assembly Speaker Sheldon Silver and Senate Majority Conference Leader John Sampson will also have to sign off on the recommendation.

Crain’s said that the new RFP surprised observers, since many expected the state to wait until the state Inspector General’s office completed its investigation on the previous selection of Aqueduct Entertainment Group as the winner of the Aqueduct video slot machine contract. Two months ago, AEG was denied a gaming license and the state withdrew its support for the group, bringing that round to an ignominious close.

The latest round of bidding will be the fifth attempt by the state to select a builder and operator of the Racino. The first attempt took place in 2001. This time, bidders are forbidden to lobby for their group, which should avoid issues that arose during the most recent selection of AEG.

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