Two Aqueduct bidders scratched from consideration for VLTs

Two bidders for the Aqueduct video lottery terminal contract were disqualified by the state Lottery Division for being "non-responsive" to the request for proposals process.
By Howard Koplowitz

Two of the three bidders for the video lottery terminal contract at Aqueduct Race Track were disqualified from consideration Tuesday for being “non-responsive” to the request for proposals that outlines how the bidding process will work, the state Lottery Division announced.

The bid from a group comprised of SL Green, Hard Rock International and Clairvest Group and the proposal from Penn National Gaming were thrown out because the plans “did not conform with the requirements of the competition and instead, attempted to negotiate for terms more favorable to the bidders,” according to the Lottery.

That leaves the proposal from Genting NY LLC, a subsidiary of a Malaysian-based gaming and hospitality company, as the only remaining bid for the Lottery to consider.

The state has until Aug. 3 to decide whether it will award the VLT contract to Genting.

A Lottery spokeswoman said that although Genting still is in the ring, the division can choose to pick no one for the contract and rebid.

If Genting is not approved, the Lottery said neither the SL Green-led group nor Penn National would be eligible for reconsideration because it would be unfair to other groups that showed preliminary interest in the contract but declined to submit a bid.

Instead of submitting signed copies of the memorandum of understanding attached to the RFP, both SL Green/Hard Rock/Clairvest and Penn National “offered altered versions of the MOU (memorandum of understanding) containing ‘material deviations,’” the Lottery said.

The division said the SL Green-led proposal was “non-responsive to the RFP on a number of substantial issues” and listed 19 points as to why the group was disqualified.

Among them were SL Green’s failure to agree to provide interim funding for New York Racing Association operations while the VLTs were to be built. It also demanded that the minimum $300 million licensing fee the winning bidder must pay to the state be held in escrow “and released to the state only after the satisfaction of conditions defined by SL Green,” the Lottery said.

The SL Green-led group also wanted to be exempt from state and local sales taxes in connection with the construction of the VLTs, the division said.

Penn National was “non-responsive” to the RFP as well, the Lottery said.

Among the company’s demands were that it be able to terminate the VLT license on its own at any time if the casino was not profitable for four consecutive calendar quarters, the Lottery said.

Like SL Green, Penn National also wanted the minimum $300 million licensing fee to be held in escrow until conditions it stipulated were satisfied, the division said.

Reach reporter Howard Koplowitz by e-mail at hkoplowitz@cnglocal.com or by phone at 718-260-4573.

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