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Saturday, January 30, 2010

AEG is AOK With Speaker's Demands

The New York Times reports that Jeffrey E. Levine, a partner in the Aqueduct Entertainment Group, confirmed that his company had agreed to all of the conditions set by Assembly Speaker Sheldon Silver. And thus, yes, it's true. We have a winner.

Well, probably. There's just the little matter of that contract between AEG and the state which the governor's office hopes to the next 30 days with AEG covering the obligations for the operation of the casino. [DRF] I'm sure that won't be a big deal.

Here's the list of what the Speaker extracted out of the group (those being made public anyway):

* The up-front licensing fee will be increased from $200 million to $300 million.
* The facility will occupy no more space that the previously-approved plans submitted by MGM – before they walked away from the project years ago.
* No approval shortcuts will be allowed.
* All investors and just about anyone else with any responsibilities will have to get a license from the State Division of the Lottery.
* Anyone who has been denied a gaming license in any jurisdiction anywhere in the world can’t have a license.
* Anyone convicted of a felony in the past 15 years – or tax evasion, fraud, “larceny of any sort, theft, misappropriation or conversion of funds” is likewise out.
[Queens Courier]
Tom Precious' story changed with the events throughout the day. He originally reported that sources informed him that Paterson was selecting AEG because he actually did not want them; hoping and believing that the Assembly would balk. But now Precious suggests a reason why AEG may have suddenly become appealing to the embattled governor.
[Rev. Floyd] Flake was most recently in the news suggesting he might support Attorney General Andrew Cuomo to run for governor against Paterson in what promises to be, if it happens, a divisive Democratic primary. Flake, however, did not close the door to supporting Paterson.

Paterson is the state's first African-American governor, and there are signs that a number of key black Democrats are getting set to ask Paterson to step aside for a Cuomo run, possibly as soon as the weekend of Jan. 30. Paterson's poll numbers have been improving, though they are still in the political basement, and Cuomo has five times as much money in the campaign bank as the governor.

A Flake endorsement of Paterson could be used by allies of the governor to slow down Cuomo’s inroads with black Democratic leaders. [Bloodhorse]
As you may know, it had been thought all along that Flake's presence in the group was meant to appeal to Senator Malcolm Smith, so that would be an odd twist. It will certainly be interesting to see what Flake does.

The Times surmises that the jilted bidders could pose a problem.
But the long awaited decision could still run into trouble from rival bidders, including Penn National, which said it was “shocked and dismayed” by the governor’s decision because it had submitted the highest offer for an upfront payment, $300 million. [NY Times]
However, if it's true that AEG has agreed to pay that much (still $70 million short of the Delaware North deal which fell apart), that argument would be partly negated. Still, I for one would like to know just why it is.... and what is so outstanding about AEG's bid.....that the Senate leadership was so adamant and stubborn in its support for a company with no experience operating racinos, a modest portfolio of gambling properties, and which was offering $101 million less than the highest bidder at a time when the state is in dire fiscal straits.


Anonymous said...

The slot machines will be open on Palm Sunday, Easter Sunday (both of them) and Christmas.

Patterson should see that the OTBs are too!

Patterson should consult his attorney on NY PML Sec. 105.

Perhaps when your subordinate wants your job you can't make him work and give you a Formal Opinion?

Anonymous said...

One would think this is a problem ...

Assembly sources said that's a "potential problem" for at least two smaller AEG investors, including Darryl Greene, an associate of Flake's firm and onetime business partner with Senate President Malcolm Smith (D-Queens). Greene was convicted in 1999 of stealing $500,000 from city agencies and private firms that paid him for affirmative-action hiring services.


Alan Mann said...

>>One would think this is a problem

True, but the agreement as outlined here says that they would "be out." If they are small investors as the Post article says, then the group would just move on without them.

SaratogaSpa said...

somehow I think HBO or FX could make a great "ripped from the headlines" behind the scenes reality show on all this.

DiscreetPicks said...

Gulfstream - Race 2

#2 Afleet Express (3/1 ml)

Jimmy Jerkens colt by Afleet Alex was completely shut off at the start and checked hard in his debut, dropping way back towards the rear early. Remained out of the camera view all the way down the backside, but came circling wide into the lane and ran right past the entire field down the stretch run, even being taken in hand late. Looks to have been training quite well since arriving in Florida, in fcat he comes into the race today off a bullet move @ Palm Meadows that was nearly a full second faster than the next-fastest drill at the distance. Jerkens is also very solid with second-time starters, hitting @ 20% (for a flat-bet profit) with a pretty good sample size. Clearly has more speed than shown, what with the gate incident last time, but gets plenty of speed to run at here regardless. Would expect a good stalking trip here; should run very well. Potential Derby prospect.

Anonymous said...

Lots of "suing the State" threats being kicked around. This whole process was rather "loosely" defined, nothing like a regulated RFP or procurement process.

In fact, language from the Governor's Solicitation of Bids letter that essentially served as the rules sheet for all the bidders, spells out how vague and uncertain the whole thing was:

"The State reserves the right to select a Vendor on the basis of its initial proposal in response to this solicitation without further negotiation, to negotiate exclusively with one potential Vendor or to negotiate with more than one potential Vendor, to request revised or supplemental proposals from one or more potential Vendors, or to cancel this solicitation without a selection."

Talk about "buyer beware!" All the bidders knew this, so for any of them to say "we'll sue because our bid was for more money, or we are superior" appears to be trumped by the fact that the State reserved the above rights to do whatever it so chooses with whichever bidder it wanted at any time.

By selecting AEG, the State is now in a position to ask that group to jump through hoops, agree to new standards, licensing, payments, timelines, whatever as is evident per the Speaker Silver list.

Anonymous said...

I am delighted that the Leaders have chosen a VLT operator. I thought AEG was one of the better of the bunch and am glad they have been chosen. It is clear they have the support of the community which I have always felt was important as the operator will need community support and it is important for the community that the operator will give them input into their plans and operations.
SL Green would have been my second choice and it looks like they were the 2nd choice in Albany too.

It must be disappointing for the losers but it is great we have finally got an operator and lets hope there wont be any roadblocks to getting the casino built in rapid time.

Anonymous said...

Interesting that Charlie Hayward wanted SL Green. Does this signal that Charlie's influence is waning or that his days are numbered at NYRA?

Anonymous said...

and here is George, "And on Wednesday, responding to a request for help from the Democrats, Republican County Comptroller George Maragos said he would freeze the raises at least until the county attorney’s ruling."

The Nassau County Comptroller received/reviews Nassau OTB's financials. The Nassau County Comptroller sends people to the Nassau OTB Board of Directors' Meetings.

The Nassau County Comptroller should help see that Nassau OTB is open on Palm Sunday and Easter Sunday, both Greek and Roman Catholic.

We want to bet.
If the State looses over $250,000 by the OTBs being closed on Palm Sunday, Nassau County must lose money too! A similar amount is lost on Easter Sundays too!

NY PML Sec. 105. If you need a lawyer George, I am sure you have a couple on staff.

What's up George? Let's bet and open Nassau OTB on Palm Sunday and Easter Sunday.

A new day is dawning. The Republicans control the County Legislature and there is a Republican County Executive.

Show 'em up George and make money.

Reading NY PML Sec 105 is not rocket science and the courts are open for business if need be.

Give 'em hell George. Make Bettors happy.

Can you imagine the audacity of the State of NY telling a public benefit corporation which religious holidays it must close and not make money on? I don't think so.

What do you think George?

DiscreetPicks said...

Afleet Express broke slowly again and ran second.

Anonymous said...

not rocket science?
with the proper corporate ethos and communication with the employees much might be accomplished? a little common sense goes far?

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County Comptroller's Office
Breadcrumb Start you are here >Home/News Releases/2010

January 26, 2010
Comptroller Maragos Requests Nassau OTB’s Financial Data
Once known as a “Cash Cow,” Nassau OTB will lose money in 2009

Nassau County Comptroller George Maragos is conducting a comprehensive review of the Nassau Off-Track Betting’s finances to determine the reasons for the decline in revenue to the County over the last several years. There is also further risk to the County for loss of all future revenues because of a proposed New York State bill to merge the Nassau OTB with the New York City OTB.

The County surtax and profit revenues from the Nassau OTB declined each year, from $14 million in 2004 to $5.1 million in 2009. This is a 64% decline over 5 years.

"While the downturn in the economy has affected almost all of Nassau’s businesses, the current financial condition of the Nassau OTB directly affects the County’s budget and year-end results,” Comptroller Maragos said. “I want to review their books and see if there is anything we can do to reverse their bad luck. It is interesting that while the operating revenues of the Nassau OTB declined in the last 5 years by 64%, their Administrative Expenses increased by over 50% during the same time period. This type of management performance is not going unnoticed. We must protect the County taxpayers.”

Comptroller Maragos has reached out to New York State Comptroller Thomas DiNapoli and requested he use his authority to conduct an independent full review of the Nassau OTB.

The Comptroller also stated that the County should fight any attempts to merge the Nassau OTB with the failed New York City OTB.

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Anonymous said...

My understanding in all gaming markets is that if one person cannot get licensed, his/her stake is bought back by the group or another investor and the group moves on. It looks like AEG has agreed to Silver's demands. This is good as it will mean we will finally have much needed VLTs' at Aqueduct.

I agree with the earlier comment that it must be disappointing for the other bidders. However they are all big players and so need to move on and not do anything to jeopardize the flow of money that racing needs from the Aqueduct VLTs'.