RSS Feed for this Blog

Tuesday, May 11, 2010

First 17 Million Things First

It was the Lottery Division which issued the latest Request For Proposals (RFP) for the Big A racino, and it's that agency which will recommend a bidder to Governor Paterson...and it plans to do so by August 3. It's the State's special "highly compressed" 12 week plan, no meals served (not even snack and beverage service).

Of course, even if you accept that they will actually hold to that timeline, VLT revenue which is, at a very minimum and only possible figuring on a temporary facility, some nine months away, seems rather insignificant at this point in time given that NYRA could be just a few weeks away from not having enough cash in the bank (considered to be $5 million) to continue operations. Paul Post reported in the Saratogian on Tuesday morning that the Senate Democrats blocked an attempt by Senator Roy McDonald (Republican from Saratoga) on Monday to attach a bill approving the $17 million loan to the latest budget extender. The Democrats claim that, as an appropriations amendment which has to "age" for three days, it would delay the budget extender and thus cause the shutdown of state government.

They're getting nervous in Saratoga; the city's Chamber of Commerce will join with a host of breeding farms in a lawsuit to force the state to do what it is agreed in writing to do. Who knows, maybe that's what it will come down to in the end; though I suspect that the legislature would step in at the last minute in any event with Saratoga involved. If NYRA is going to run out of money, at least the timing is right; I don't think too many people whose livelihoods aren't at stake would get too worked up about an interruption of racing at Aqueduct. Or even Belmont, after June 5 anyway. It will be after the Belmont Stakes that the countdown will really begin. I don't know if NYRA wants to announce a drop dead date lest it remind wary lawmakers of NYC OTB's ultimately empty threat.

Back to the RFP, this should give you an idea of just how quickly they are hoping to move:

RFP Issued May 11, 2010
First Vendors’ Questions Due – 4:00 pm May 18, 2010
Lottery Responses to First Questions May 25, 2010
Entry Fee Due June 1, 2010 [$1 million, to be refunded to the losers]
Mandatory Bidders Conference – 12 noon June 8, 2010
Second Vendors’ Questions Due - 4:00 pm June 15, 2010
Lottery Responses to Second Questions June 22, 2010
Vendor Proposals Due - 4:00 pm June 29, 2010
Apparent Winning Proposal Announced August 3, 2010
That's five weeks between the proposals are due on June 29 and the announcement of the "apparent" winner. Not much time, especially if Lottery employees are being furloughed one day a week. And then, of course, even if they're on time, the winning bidder has to be agreed to by Sheldon Silver and the Senate Democrats (the governor is committed to the Lottery's selection). However, that might not be as bad as it sounds this time around. Silver, after all, would have no reason to oppose a bidder chosen in this fashion given that the Lottery has adopted his requirements of $300 million minimum up front, as well as strict licensing requirements for principles and investors. And given the special attention that the Senate Democrats are getting from the Inspector General in his AEG probe, I'd expect them to be compliant in this particular case (which could be wishful thinking, I know).

And I guess that the accelerated timeline doesn't allow for sharing with the public during the process. The Lottery, in a statement, said: "All bids will be made public once a winner is selected." And here's an interesting little clause I found in the RFP (which you can read and download here):
A Vendor may not issue a news release pertaining to this RFP or the services, evaluation, or project to which it relates without prior written Lottery approval, and then only in accordance with express written instructions from the Lottery.
That kind of attempted control of information seems to be a step backward even from the secrecy of the last round. The only mention of a public hearing is one at which the bidders can make presentations to the local Community Board 10.

Speaking of "apparent winners," what the hell happened to Aqueduct Entertainment Group? After making some noise about a lawsuit, they seem to have made a hasty retreat. Their website is not even functioning. I suppose however that there's nothing preventing them from entering the race again. I'll be interested to see if Penn National is back after the way they stormed off in a huff last time. That company has moved on to bigger and better other things having bought into 50% of Pimlico and Laurel along with Frank and MI Developments. However, that only cost them a reported $50 million, which would not take them out of the game. According to the Wall St Journal:
Penn National's role is mainly to oversee an effort to bring slot machine gambling to Laurel Park
. Even if a move to overturn the state's prior award of a racino license to The Cordish Cos. (rather than Laurel) by referendum succeeds, the company would have to get around state law which prohibits it from operating more than one racino; it was awarded a license to build a racino in Cecil County.

And all of that brings us to the post...


Anonymous said...

Just mark me down as a "bet against" this happening on time, or ever for that matter.

Undefeated on this wager so far, may as well let it ride. EZ money.

If they REALLY wanted to get this done timely, they would just have Lottery review the remaining bidders, correct? That should take about a week, at most.

So one must ask why not go that route?

Could it be that another mystery bidder is waiting in the wings, another AEG type entity with tentacles throughout the legislature?

Do not put anything past these Albany creeps, they simply will not be able to resist dipping their dirty little fingers into this slimy little pot, wait and see.

All the other bids are now mostly public, so it will be very simple for a new bidder to structure a favorable bid.

SaratogaSpa said...

Now we are to believe that our crooked New York State Government won't screw it up this time?

The only thing I know for certain is that August 3rd is a Dark Day at the Track.

El Angelo said...

By hook or by crook, they'll make it through Saratoga. Beyond that....

Anonymous said...

btw, does the Lottery Division's control of the process now have anything to do with that Fed investigation of the last round? Priceless.

jk said...

Good luck with a loan to NYRA while "non-essential" state workers are being furloughed and denied their 4% annual raises. If they are "non-essential", why do they have jobs in the first place?

Why is NYRA broke when they charge 26% takeout on exotic bets? How high does the takeout have to go for it to be enough?

El Angelo said...

"Non-essential" is a title, not a description.

Anonymous said...

Why is the state broke when they take 8.5% of every dollar earned in NY and 4.5% of every dollar spent not to mention millions of dollars in hardly noticed fees?

Because they employ all the "non-essential" essential workers and a bunch of wolves are in charge of the hen house.

Most of the 26% takeout goes to said wolves, a good chunk is dedicated to purses leaving a small percentage for putting on the show.

The specific reason NYRA is currently in crisis is they have not been paid by NYCOTB in a long long time, but of course there are systemic weaknesses in the model and not a small amount of bureacratic waste.

Anonymous said...

Could someone please explain to me how Joe Dalton, President of the Saratoga Springs Chamber of Commerce, years ago sued the State of New York trying to stop the VLTs (because of the gambling concept) at the Saratoga Harness...only to presently sue to have the VLTs placed at Aqueduct ?

Anonymous said...

anon 748, thats easy, not in my back yard.

DRF reporting NY loan to NYRA not happening, out of money by "mid summer".

Anonymous said...

Time for Charles Waite, Adirondack Trust, perhaps a wealthy patron or 2 of the turf, perhaps a hedge fund looking for a big return, to play the surprise role of White Knight(s)and ride this rescue horse? The prediction here is that the cash will be pledged by Belmont Stakes Day, three weeks hence. /S/greenmtnpunter