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Howard Stutz

Aqueduct long shot looks golden

23 August 2010

NEW YORK, New York -- If this were a horse race, long shot Genting would have come from the back of the pack for a six-length victory with New York holding the winning ticket.

Ten days ago, New York gave the subsidiary of Malaysian-based Genting, operators of Resorts World Sentosa in Singapore, the right to run a potentially lucrative casino at New York City's famous but aging Aqueduct Race Track.

The award culminated a decade-long, oftentimes tumultuous, search.

New York's governor and legislative leaders followed the suggestion of the state's lottery division and approved Genting, based on the company's promise to pay a $380 million licensing fee and willingness to spend $1.3 billion to upgrade Aqueduct, in New York City's borough of Queens.

Genting was a surprise entry as cash-strapped New York sought an operator for 4,525 slot machinelike video lottery terminals at Aqueduct.

The state has wanted to add a casino at the track since 2001. A deal with a Buffalo, N.Y.-based company fell apart in 2008 and bidding restarted.

Last year's process attracted MGM Resorts International, Harrah's Entertainment, Wynn Resorts Ltd., Penn National Gaming and the Florida-based Hard Rock Casinos.

A consortium that included Las Vegas-based casino operator Navegante Group won the deal but lost the contract six weeks later. State and federal authorities investigated the process and ties between one of the consortium's partners and the governor.

Bidding reopened in May with the lottery running the show.

Genting said it would spend $350 million to create a three-story atrium with restaurants and a casino large enough for the slots and potentially table games, should New York follow neighboring states and legalize craps and blackjack.

"We're trying to create a first-class, day trip destination casino, not slots in box," a Genting consultant told The New York Times.

The company believes Aqueduct can generate more than $1.5 million a day in tax revenue for New York.

Union Gaming Group principal Bill Lerner said projections of $650 million in annual gaming revenues may not be lofty. The 5,310 VLTs at Yonkers Raceway generated about $581 million in gaming revenues last year "in a less favorable location."

If that's the case, another line has been added to Atlantic City's impending eulogy.

But this being the plagued Aqueduct process, Genting shouldn't celebrate yet.

Litigation by Navegante's former partner and rejected bidder Penn National could overturn the process.