Updated on 08/09/2010 4:57PM

New York Lottery approves Aqueduct casino bidder

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Genting New York, a subsidiary of a sprawling Malaysian company that also owns a large minority stake in a New York harness track, should receive state approval to operate a long-stalled casino at Aqueduct racetrack in Queens that could inject $60 million into the New York Thoroughbred industry each year, the New York Lottery said on Tuesday.

Lottery’s recommendation to approve the company comes three months after the state reopened bidding for the Aqueduct casino. Two previous selections have been scuttled for a variety of political and financial considerations that have frustrated bidders, politicians, and racing officials.

The recommendation will have to be endorsed by Gov. David Paterson, who has already said that he will accept lottery’s recommendation, and by the leaders of the state’s Senate and General Assembly.

“We are reviewing the recommendation of the lottery,” said Sisa Moyo, a spokesperson for the Speaker of the Assembly, Rep. Sheldon Silver. Moyo said she could not provide a timetable for when Silver would make a decision about whether to endorse the recommendation.

Sen. Malcolm Smith, the Senate Majority Leader, did not respond to a request for comment by Tuesday afternoon.

Genting New York was the only candidate to be evaluated during this round of bidding, following the disqualification of the two other bidders shortly after proposals were accepted on June 29. In its bid, Genting offered the state $380 million as an upfront payment to operate the casino for 25 years, and its “proposal was far superior, in concept, scope, detail and execution, to any we have seen in previous rounds of evaluation,” said Gordon Medenica, the director of the lottery, in a letter sent to Paterson on Tuesday with the formal recommendation.

The New York Thoroughbred racing industry is banking on the Aqueduct casino to stabilize its flagging business during a time of widespread economic upheaval in the industry and the fallout from the bankruptcy of the New York City Off Track Betting Corporation. The New York Racing Association, which operates Aqueduct, Belmont, and Saratoga, expects to receive approximately $32 million a year in revenue from the casino each year, while horsemen are expected to receive approximately $30 million in annual purse subsidies, according to NYRA’s chief executive, Charles Hayward.

“It’s going to be a big day today for NYRA, breeders’ and horsemen,” Hayward said just prior to lottery releasing its recommendation.
Although it is unclear how long Genting would need to complete construction of a casino, previous bidders have estimated that it would take at least nine months to open a facility.

Genting is one of the largest companies in Malaysia, with dozens of gambling and hotel properties, along with investments in energy and agriculture. In 2009, the company paid $55 million for a 49 percent stake in Monticello Raceway, a New York harness track that also operates a casino. In addition, the company has provided financing for the construction of two other racetrack casino properties in New York, and many of its top officials had already been evaluated by the lottery for their suitability for casino licenses.

The casino has been approved for 4,500 slot machines and is expected to be one of the highest-grossing casino properties on the East Coast. Adjacent to JFK airport, Aqueduct has its own subway stop, and it will be the closest casino property to the center of Manhattan in the U.S.

Medenica said in his letter to Paterson that Genting’s proposal was “impressive on many levels.”

“Genting took nothing for granted – they respected the very rigorous selection process that we developed after the missteps of the past,” Medenica wrote. “They understood the business risks that a winning bidder is required to accept, and they have a clear and rational plan for navigating the complex construction and operating environment of New York City.”