Genting Gets Aqueduct Nod, Now On To Governor
The massive Malaysian gambling company, Genting New York, has crossed the finish line alone to win the right to run the lucrative gambling Racino at Aqueduct Racetrack in Ozone Park, the New York State Lottery Division announced on Tuesday afternoon. “It is with genuine enthusiasm that the committee unanimously recommends Genting New York as the winning vendor. Our strong recommendation, based on the merits of the proposal, was vastly reinforced by Genting’s financial offer of $380 million as an upfront licensing fee,” said a prepared statement by Lottery Division officials. “Genting’s proposal was impressive on many levels. They are a vastly experienced and professional gaming company and their proposal reflects a deep and insightful understanding of the opportunity and challenges of Aqueduct. Genting took nothing for granted – they respected the very rigorous selection process that we developed after the missteps of the past. They understood the business risks that a winning bidder is required to accept, and they have a clear and rational plan for navigating the complex construction and operating environment of New York City. In addition, they are highly sensitive to the community issues, labor requirements and social concerns that a project of such scope encompasses.”
A lottery spokesperson said that Genting’s proposal was far superior, in concept, scope, detail and execution, to any it had seen in previous rounds of evaluation.
“It is well known that other bidders, and potential bidders, found the State’s requirements too demanding to accept,” the lottery spokesperson added. “They made the fatal assumption that the process was still open to maneuvering and negotiation. We acknowledge that the process was tough and the expectations were rigorous, but our requirements were crystal clear. For Genting to emerge from such a grueling process as a strong winner is a testament to the effort, skill and intelligence of their team. Every aspect of their proposal demonstrated the highest standards of professionalism and respect.”
Genting received 95 out of a possible 100 points, scoring high marks for its balance sheet (its publicly traded parent company, Genting Malaysia Berhad, has $1.6 billion in cash on hand and a market capitalization of $5.25 billion), its plan to involve minority and women-owned businesses, and its marketing plan for the site. The company hopes to target travelers stuck for a few hours at nearby John F. Kennedy Airport to help build its gambling business.
Lottery officials said Genting’s hope to open the first phase of the project, encompassing 1,600 of an eventual 4,525 video lottery terminals, within six months might be “overly ambitious,” but company executives insisted they had the experience and resources to meet the proposed timetable.
The Lottery Division’s recommendation to accept the Genting bid now goes to Governor David Paterson and legislative leaders in both the State Senate and Assembly for approval.
The three – Paterson, Senate Majority Conference Leader John Sampson and Assembly Speaker Sheldon Silver, have a right under a law passed when the process first began nearly a decade ago, to approve the Governor’s decision.
In a letter to Paterson, Lottery head Gordon Medenica wrote, “While you, Governor, have already committed to supporting this recommendation, we urge our legislative leaders to quickly add their support in order for the State to receive, finally, the massive influx of monies that this project will generate. Genting New York was not the only bidder for this project; it was the best bidder for this project. And Genting New York is not the only winner of this process; the people of New York, through jobs, economic activity and aid to education, are the bigger winners.”
Tuesday’s decision was made possible by State Supreme Court Justice Barry Kramer, who decided last week to dismiss a lawsuit that the Aqueduct Entertainment Group had brought against the Lottery Division charging that the state agency had no legal right to take the decision away from AEG after the Governor had approved the politically-connected group to run the Racino. An attorney for AEG said that it might appeal that decision to a higher court, something that would delay the construction of the Racino.
Genting New York spokesperson Stefan Friedman issued a prepared statement, saying, “Genting New York is pleased with The Lottery’s recommendation of our proposal which would mean an enormous economic boost to New York’s economy. Our plan would instantly deliver $380 million to New York and create more than 2,000 jobs in construction and operations of the Aqueduct casino.”
“In addition,” Friedman said “The casino is expected to generate more than $500 million per year in state revenue, a large portion of which will go towards education funding which would help save thousands of teaching jobs and to NYRA which will help preserve 1,500 jobs that are threatened with layoffs. We hope The Lottery’s recommendation will be endorsed by the Legislature so we can immediately get to work creating jobs, preventing layoffs and delivering more than $15 billion in economic benefits to New York over the next 30 years.”
Assemblywoman Audrey Pheffer says that she is glad the process is over and the actual construction can begin.
“After countless delays and false starts, I am happy that the State Lottery Division has recommended the gaming consortium Genting New York to develop the video lottery terminal facility at the Aqueduct Racetrack,” she said. “I have already spoken with Speaker [Sheldon] Silver and now strongly urge Governor David Paterson and Senate Democratic Conference leader Sampson to move quickly to approve Genting’s proposal so that we can insure that our community’s vision for the new Aqueduct becomes a reality.”
City Councilman Eric Ulrich said, “I am very pleased that NY Lottery has unanimously selected a winning vendor for Aqueduct. This has been a long and drawn out process for the community, but I am happy that it is finally going to reach the finish line.”
“At this time, Governor Paterson, Assembly Speaker Silver, and the Senate Democratic leadership must act as soon as possible to approve this plan. This redevelopment has tremendous potential to create good paying jobs and will go a long way in helping to revitalize the surrounding community,” Ulrich added.
The company, which eventually plans to place 4,500 video slot machines at the Aqueduct facility, promises that it will have 1,600 of those VLT’s up and running within six months. The remainder, they say, will be in place by next summer.