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VLTs at Aqueduct still a shaky bet

The New York State Division of the Budget (DOB) has released a letter seeking “expressions of interest from experienced gaming operators” to operate a 4,500 machine Video Lottery Terminal (VLT) facility at Aqueduct race track in Ozone Park - and calls for responses by October 15.
The only problem is that there’s no guarantee that Governor Eliot Spitzer’s plan for racing and gaming at Aqueduct, Belmont and Saratoga race tracks, which was announced on Tuesday, September 4, will be approved, leaving bidders largely in the dark.
On Wednesday, September 12, the day the DOB letter was announced, State Senate Majority Leader Joe Bruno declared of Spitzer’s plan, “I can tell you now that what the governor submitted will not be the final product.”
That same day, officials with Empire Racing Associates, one of the bidders for the racing franchise, said they were considering suing the company which authored the “integrity report” that Spitzer demanded after taking office. Prospective bidders were each charged over $1 million to finance the report.
Another bidder, Excelsior Racing Associates, a group headed by New York Yankees owner George Steinbrenner, had been favored to assume control of the tracks by a bipartisan committee formed in 2005 by former Governor George Pataki, Bruno and Assembly Speaker Sheldon Silver, but Spitzer rejected their proposal, and restarted the process.
In the hours between Bruno’s and Empire Racing’s September 12 declarations, an expert told a Senate hearing that the selection process was “sloppy” and gave credence to Empire’s assertions.
Bennett Liebman, coordinator of the Racing and Wagering Law Program at Albany Law School and a former official in both Republican and Democratic administrations, warned the Racing and Wagering Committee that Spitzer’s tentative agreement with the New York Racing Authority (NYRA) doesn’t have enough safeguards to oversee the troubled operator, which has been dogged for years by investigations of its prior management.
Liebman refused to condemn the choice, however. “There are no white knights among its competitors,” he said, adding, “I’m going to say it’s not a bad idea to use NYRA.”
The situation leaves those interested in operating VLTs at Aqueduct unsure of whom they’ll be working with, whether they’ll have to build the facility or rent it from the state, whether they’ll have hotels, entertainment or shopping venues to draw players, or whether a competing VLT facility will be constructed at the nearby Belmont race track in the future.
What they do know is that the state is expecting that each machine will net over $111,000 a year by 2010 although machines at the nearby Yonkers VLT facility have only netted about half that amount in the last year, and that the law that allows VLTs in New York State expires in 2014.
Any firm interested in bidding should contact David English, New York State chief budget examiner at 518-473-7512.

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