Saturday, January 30, 2010

Mohegan Tribe Loses Aqueduct VLT Slot Parlor Bid

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New York Governor David Paterson announced yesterday that Aqueduct Entertainment Group was chosen over five other bidders to build and operate a 4,500 VLT slot parlor at the Aqueduct Racetracks in Queens, N.Y.

The selection of AEG is the second time a bidder has been selected for the Aqueduct project. In 2008, Delaware North, who runs Saratoga won the bid but backed out of the deal last year which necessitated a new round of bidding that culminated with yesterday´s selection.

The Mohegan Tribe, through entities, participated in both rounds of bidding. In the first round, the Tribe teamed up with Australian racing executives to form Capital Play.

New York Racing Association runs the racing at state-owned racetracks, including Aqueduct. NYRA president Charles Hayward said in 2008 that Capital Play was the only group he did not want to get the gaming contract.

In the latest round of bidding, the Mohegans were the only group that proposed only to manage an Aqueduct slot parlor and not build it.

New York first approved video lottery terminals, which look like slot machines, at Aqueduct Racetrack in 2001 but delays have since ensured that they were never installed.

The state will apply a sliding scale tax rate of between 60 and 70 percent on revenue generated by the VLT slot machines.

Much could change before an Aqueduct VLT slot parlor is opened. AEG could have difficulties in meeting the contract terms similar to what happened last year when the winning bidder from the first round, Delaware North, was unable to pony up a $370 million up-front payment last year and triggered a new search.

The size of the project could also expand, including the number of VLT slot machines. Last September, Gaming Insider quoted a source saying, "There’s a lot of room for imagination and power politics to roam at Aqueduct, considering the complex has nearly 200 acres.¨