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Howard Stutz

Aqueduct bidding fast and furious

31 August 2009

QUEENS, New York –- The bidding for a casino at New York's Aqueduct racetrack has turned into an old-fashioned Wild West shootout.

The stakes are high for gaming's biggest players.

In an industry that has seen few expansion opportunities in the past 18 months sits the historic Aqueduct racetrack in Queens, less than 15 miles from Manhattan. A casino attached to the site will house 4,500 video lottery terminals.

The bidding process has drawn proposals from six groups, each with its own gaming company component. The list includes MGM Mirage, Wynn Resorts Ltd., Penn National Gaming, Hard Rock Entertainment, Larry Woolf's Navegante Group, and Harrah's Entertainment, which joined a Buffalo, N.Y.-based consortium last week.

Analysts predict a casino at Aqueduct, with restaurants, a hotel, and other nongaming entertainment venues, could entice gamblers to deposit more than $1 million per day into the facility's VLTs.

Therefore the bidding has become fierce, overly political and even cutthroat.

"It's not surprising that everyone has come out of the woodwork for this opportunity," Macquarie Securities gaming analyst Joel Simkins said. "It's going to be lucrative and it's a license to print money, per se."

Woolf's group includes an ex-U.S. Congressman turned minister whose congregation includes Queens. Radio ads were produced questioning whether Wynn's high-end plan would fit with Queens.

"This place doesn't need to have Vegas," Woolf told the Albany (N.Y.) Times-Union. "We're going to have Corona Italian ice and hotdog vendors like a New York City neighborhood, but not a six-star facility like Wynn proposes."

MGM Mirage faced unfair scrutiny when the New York Daily News blared a salacious headline about New Jersey's investigation of the company's partnership with Hong Kong businesswoman Pansy Ho.

Gov. David Paterson and New York officials are being wooed by the bidders.

The state faces a $2.1 billion budget shortfall. With promises of $150 million to $300 million in upfront and annual payments and pledges of millions from gaming revenues taxed at 70 percent, New Yorkers are paying heed.

"Some of the bids are more real than others," Union Gaming Group partner Bill Lerner said to investors.

Wynn Resorts Senior Vice President Tom Breitling told the Queens Tribune his boss has a history of success.

"There is a certainty of execution," Breitling said. "When it comes to credentials, nobody comes a close second to Steve Wynn."

Paterson could make the selection by Labor Day. But the governor also faces scrutiny. The Daily News reported one of his legal advisors once represented the Buffalo-based bidder that partnered with Harrah's.

It's just another day at the O.K. Corral.