When it comes to the Aqueduct racino project, in the pipeline for almost a decade, there’s never been a shortage of surprises. The latest came last month when the New York State Lottery Division announced it was tossing out two of three bids to build and run a slot parlor at the historic Queens racetrack. The sole contender now is Malaysian casino company Genting, which owns properties in Singapore and the U.K., recently invested in MGM Mirage in Las Vegas and has invested in Monticello Raceway in New York.
Lottery officials said the disqualified bidders—Pennsylvania-based Penn National and a partnership of urban developer SL Green and Hard Rock—“did not conform with the requirements of the competition.”
Neither Penn National nor SL Green submitted signed memoranda of understanding, lottery officials disclosed, but instead offered altered versions of the MOU that included more favorable terms for the bidders. The announcement listed 19 “non-responsive” points on the SL Green proposal, and eight on Penn National’s. The Albany Times-Union reported that, among other things, SL Green sought to sidestep the $300 million non-refundable licensing fee, payable on selection of a winner.
Even if Genting is not confirmed, the two failed bidders, each of which has vied for the slot rights at Aqueduct in the past, will not be eligible to re-bid. However, two other companies—Delaware North and Empire City—would be able to compete for the franchise if Genting is not chosen. Both companies were involved in the latest bidding process, but did not submit formal offers last month.
While Genting’s proposal “appears to conform with all the requirements of the bid submission process,” its selection to build and run the 4,500-VLT racino is far from assured.
A gaming analyst recently told the Malaysia Star that the move was a risky one for Genting, with a level of investment that might not justify the return.
“We understand the project involves billions of dollars,” said the unnamed analyst. “Genting NY’s chance of winning is at best hopeful.”
This is New York’s fourth attempt since 2001 to select a gambling operator for Aqueduct. Last year, Governor David Paterson picked Delaware North to run the racino, but the company failed to raise a then-$370 million upfront-fee. In June 2009, the governor picked Aqueduct Entertainment Group. That deal collapsed amid charges of bid rigging.