Thursday, July 17, 2008

The Tribe In The Media: Mohegan's Bid To Manage N.Y. Slot Parlor

The Tribe In The Media series republishes below an article that is to appear in tomorrow's edition of The Thoroughbred Times on recent events in the Tribe's bid to operate a 4,500 VLT slot parlor at a racetrack in Queens, N.Y.:

Vetting of bidders latest snag in Aqueduct racino decision
By Paul Post
The Thoroughbred Times

The head of a group seeking Aqueduct’s gaming contract has stepped down to expedite the state’s decision process, which could take several more weeks.

Irish-born Karl O’Farrell had been chief executive officer of Australia’s Capital Play Inc., which challenged the New York Racing Association to run the state’s Thoroughbred racetracks and now is seeking the contract for Aqueduct’s proposed video lottery terminal facility.

The state Division of Lottery, which oversees VLTs, is investigating the principals of each bidder, which in O’Farrell’s case is taking much longer because information must be obtained from overseas. Temporarily, he has turned the company’s reins over to Mitchell Etess, president and chief executive officer of Connecticut’s Mohegan Sun casino, Capital Play’s gaming partner in the Aqueduct proposal.

“We were always going to put Mitchell in charge of the VLTs anyway,” O’Farrell said on Wednesday. “I’ve stepped aside in my position. I’m still with the company, but I’m not making management decisions until my review is complete.”

New York-based Delaware North Companies and S.L. Green Realty Trust, a Manhattan real estate company partnered with Hard Rock Entertainment, also are seeking the gaming contract.

Although incorporated in New York, Capital Play’s roots are in Australia, whose racing model it has touted since emerging as a competitor for the state’s racing and gaming contracts.

O’Farrell was highly critical of NYRA during the racing franchise selection process and NYRA President Charles Hayward said recently that Capital Play is the only group he does not want to get the gaming contract.

State officials said on Friday that a gaming decision might be forthcoming within a next week or ten days. O’Farrell, however, said he was told that his vetting process could take another four to six weeks to complete, prompting him to step aside.

“We know that the state wants to make a decision,” he said. “My review was going to hold it up. I’m the only foreigner on any of the teams. There’s pressure to get this decision made.”

The state is losing more than $1-million per day for every day the Aqueduct racino is not operational. The 4,500-machine facility is expected to generate at least $450-million per year, which could provide major new revenue streams for NYRA, horsemen, and breeders as well as much-needed capital improvements at all three NYRA tracks—Aqueduct, Belmont Park, and Saratoga Race Course.

Racino construction is expected to take at least a year, meaning it could come on line by late 2009.

The state’s failure to act is a mystery to some of its top elected officials.

“Most of that’s being done behind closed doors,” said Assembly Minority Leader James Tedisco (R-Schenectady), who district includes Saratoga Race Course.

Morgan Hook, a spokesman for Governor David Paterson, said there is nothing specific holding up the process.

“It’s just taking longer than expected,” Hook said. “We want to allow Senator [Dean] Skelos a certain amount of time to get up to speed with the governor and speaker [Assembly Speaker Sheldon Silver (D-Manhattan)] on these three bidders.”

Skelos (R-Long Island) recently succeeded Joseph L. Bruno as Senate Majority Leader. Bruno has decided not to seek re-election and announced on Wednesday that he will not finish out his term. Friday will be his last day on the job.