Proposal For Racino
The New York State Legislature legalized video gambling devices at racetracks in 2001. However the opening of a racino at the track has hit various problems. Video lottery terminals similar to slot machines were approved at five locations, including Aqueduct, Finger Lakes Race Track, Monticello Raceway, Vernon Downs, and Yonkers Raceway. The revenue would be divided between the racetracks and the state and would allow tracks to increase purses and attract better quality horses in races.
In 2007, the state issued a request for proposals to operate the video lottery terminals at Aqueduct. Among the bids received was a $2 billion proposal by the Shinnecock Indian Nation to open a casino at the track. The proposal was in conjunction with Marian Ilitch, a co-owner of the Detroit Red Wings. The proposal according to most sources was dead on arrival since even if the Shinnecocks received official Bureau of Indian Affairs recognition as a tribe (which they are still awaiting), the Aqueduct Casino would still have to be approved by the New York State Legislature, the Bureau of Indian Affairs, and Aqueduct would have to first be taken into trust by the Department of Interior since the Shinnecocks historically had not owned property in Queens. In October 2008, the state selected the Delaware North as the winning bidder among three proposals to build a racino at Aqueduct. The 330,000-square-foot (31,000 m2) facility would include 4,500 slot machines. However, these plans fell apart in March 2009 when the developer was unable to make a $370 million upfront payment to the state.
In July 2009, seven companies submitted bids to develop a racino at Aqueduct: Aqueduct Entertainment Group, Delaware North, MGM Mirage, Mohegan Sun, Penn National Gaming, SL Green Realty, and Wynn Resorts. Some developers indicated that a portion of the slot machines could open as early as April 2010. However, the selection of an operator for the casino was delayed for several months because State officials frequently changed the rules and could not reach an agreement on the winning bidder, prompting Wynn to pull out of the running in November. On January 29, 2010, Governor David Paterson announced that the Aqueduct Entertainment Group would run the casino.
Aqueduct Entertainment Group partners included GreenStar Services Corporation, Turner Construction Company, Levine Builders, The Darman Group, Empowerment Development Corporation, Navegante Group, PS&S Design, Siemens AG and Clairvest Group. The appointment generated controversy because of charges that AEG, which had the worst initial bid of those bidding, was allowed to change its bid so that it had the best. Paterson was reported to have demanded that the ownership of an affirmative action component. During this time singer Jay-Z, through his company Gain Global Investments Network LLC, then got a 7 percent ownership of AEG and charges were made that Jay-Z and Paterson had a personal relationship. U.S. prosecutors investigated the bidding process particularly in the light that AEG won the bid two days after Queens megachurch pastor Floyd Flake (who is also an AEG investor) threatened to switch his support in the 2010 governor race from Paterson to Andrew Cuomo. New York house speaker Sheldon Silver also threatened not to sign off on the deal. Paterson maintained there was no quid pro quo. On March 9, 2010 Paterson, Flake, and Jay-Z withdrew from further involvement. Paterson said he was recusing himself on the advice of his lawyers. Flake, who had 0.6 percent share said the case was distracting from his other projects. On March 11, 2010, the state withdrew its support for the AEG bid and announced that a new group would be selected through an "expedited, transparent, apolitical and publicly accountable process." Aqueduct Entertainment Group said it intends to sue.
On June 2, 2010, New York Lottery officials announced that six groups were considering submitting bids to develop the racino. These include three of the previous bidders (Delaware North, Penn National Gaming and SL Green Realty) and three new groups (Empire City Casino at Yonkers Raceway, Genting New York LLC and Clairvest Group). On June 29, three of the firms submitted bids: SL Green/Hard Rock Cafe, Genting Group, and Penn National. Clairvest participated in the SL Green/Hard Rock Cafe bid.
The bids from Penn and SL Green were disqualified in July for not meeting requirements. On August 3, 2010, Lottery officials announced they had accepted Genting Group's $380 million upfront licensing fee bid, which was $55 million more than the closest bid. Its business model includes targeting flyers stranded at John F. Kennedy Airport. The company said its plans involve 1,200 construction jobs and 800 permanent jobs and will bring the state $500 million a year in revenue. Genting opened the Resorts World Casino New York City on October 28, 2011, with 2,280 gaming terminals.
Read more about this topic: Aqueduct Racetrack, History