People who were counting on revenues from Video Lottery Terminals (VLTs) at Aqueduct racetrack in South Ozone Park had better hold their horses. The deal could be dead.
Late on Tuesday, March 10, Delaware North Companies, the winning bidder to operate a 4,500 VLT Aqueduct “Racino” that has been on the agenda since the machines were first authorized by the Legislature in 2002, announced that it could not meet the March 31 deadline to pony up the $370 million down payment.
According to a previous statement by William Bissett, president of Delaware North North’s Gaming and Entertainment subsidiary, “Since our bid was submitted in October 2007, there has been a deterioration of the credit and equity financial markets in this recession economy which has caused Aqueduct Gaming LLC to restructure the timing for its financial offer.”
Recently, Delaware North was reported to be reaching out to the governor to renegotiate payments on the development deal. They reportedly wanted to push back the payment terms until after April 1, which is the start of the state’s fiscal year.
That would have blown a $250 million hole in Albany’s cash-strapped budget – monies from the Delaware North payment being counted as receipts.
According to sources quoted in published reports, the Paterson administration is threatening to re-bid the deal if Delaware North does not come up with the money.
It is possible that the two earlier bidders, SL Green and Capital Play, may seek a second chance at the rights to operate the first legal machine gaming operation in New York City. Delaware North reportedly intends to re-bid.
“While we disagree with their conclusion that a re-bid is necessary, we nonetheless remain interested in developing Aqueduct and look forward to continue working with the administration to achieve that goal,” Bissett is reported to have said.
Delaware North’s winning bid had an initial payment $120 million higher than second-place Capital Play, which offered $250 million up front.
According to Albany’s estimate, the state is losing $1 million each day the VLT operation isn’t running.
The law that authorized machine gaming in New York is set to expire in 2014.
