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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Slot casino at Aqueduct racetrack moving ahead

5 February 2010

QUEENS, New York -- New York's governor told reporters Wednesday that the consortium chosen to run a 4,500-game slot machine casino at the Aqueduct Race Track had agreed to all the state's conditions, including the upfront payment of a $300 million licensing fee.

However, one of the group's partners, which includes Las Vegas-based casino operator Navegante Group, said negotiations are still under way with the state to complete a memorandum of understanding.

"We are committed to complying with every condition set by the state and assure the people of New York that we will be a great partner for the state and the residents of Queens for years to come," Jeffrey Levine, chief executive officer of Levine Builders and a partner in Aqueduct Entertainment Group, said Thursday in an e-mailed statement.

Navegante CEO Larry Woolf referred comments to the public relations firm handling Aqueduct Entertainment.

Meanwhile, the CEO of Penn National Gaming, one of the four unsuccessful bidders for the potentially lucrative casino contract, said Thursday he was "mystified" by the prolonged bidding process that ended last week when Gov. David Paterson announced Aqueduct Entertainment Group had won the contract.

During his company's fourth-quarter earnings conference call with analysts, Peter Carlino said the company was frustrated and discouraged by the yearlong bidding process. Penn, which operates racetrack casinos, partnered with hip-hop music magnate Russell Simmons and offered to pay an upfront licensing fee of $300 million.

In the end, Aqueduct Entertainment was to increase its licensing offer of $200 million by $100 million.

"We were the winning bidder. Twice we were the winning bidder," Carlino said in response to a question about Aqueduct. "But some people didn't like the result. We were the best qualified. I'll leave it up to New York to investigate. We're frustrated and discouraged by what happened."

Carlino said he wrote a letter to Paterson asking for an explanation.

Paterson, speaking to reporters Wednesday at the state capitol in Albany, said the conditions of the Aqueduct agreement were relayed to Aqueduct Entertainment.

"And they agreed to the terms," Paterson said.

Aqueduct Entertainment's eight partners include Navegante, led by Woolf, a longtime gaming executive.