Casino Industry News and Analysis

New York: Aqueduct Slots Stalled

New York's governor just cut off progress towards Aqueduct slots by pullng the development contract of Delaware North,- the Buffalo-based company that won the rights to expand the racetrack last fall.   Or, as the New York Post reported yesterday: '"Aqueduct Slots?  Nots!"  Oh to be a headline writer for that paper...

But not much fun up in Buffalo in Delaware North offices: Gov. David Patterson acted because the company failed to make a $370 million payment to the state by a March 1 deadline and is suffering from a severe lack of capital.  Now the state will re-bid for the rights to develop.   I suspect that there will still be plenty of interest in Aqueduct slots on the re-bid, with a relatively favorable tax rate and the great location.  Already, there's word that pressure from Delaware North's competitors contributed to this decision.

On the upside, everybody's interest is served by a bid from a solid firm, with no capital flow issues.  On the downside, this delays the development process by months-- possibly even a year or so -- as the state re-starts the process.   I still see Aqueduct slots as having huge potential on the revenue side, though the state needs to do very thorough due diligence on new bidders to ensure that a well-funded firm gets the job.  

 

New York: Belmont VLT Plans in Place

New York, New York - obviously a natural fit for gaming, given that its the "city that never sleeps" already.  With Aqueduct's VLT expansion moving forward, big questions still remain about Belmont Park, its Long Island neighbor.  According to Newsday, The state just released a report that details plans for Belmont, which involve a new gaming complex with hotel, and proposals for a senior citizen housing and sports complex adjacent to the racetrack.

Posted here, the report details various scenarios for Belmont that include a hotel, new racino and the addition of VLTs in the existing grandstand.  There are two existing parcels adjacent to the track that total 36 acres and are ripe for development.  Will the development include senior citizen apartments or a new sports complex, big box or small bore "lifestyle" retail?  The plan envisions 4,500 VLTs spread across a new racino facility and in the grandstand, or entirely within the grandstand.  It would also include a transportation hub for the Long Island RR & buses.

The "large hotel" option uses Dover Downs as a model, allowing a 300-400 room facility with easy and direct access to the VLTs, and/or grandstand, depending on one's preference.  The scope of the project approximates the plan for Aqueduct, now moving forward after passing all political obstacles last fall. 

The Belmont study is a good model of planning, with all stakeholders consulted and a number of clear options for developers and officials, all of which take into account preferences for the local community.  These stakeholders included a whole host of local and state officials, transportation specialists, community residents, regional planners and civic groups.  To my mind, this is how to go about developing a viable property in order to 1-maximize its success as a business and revenue generator, and 2-assimilate it into the local community.

The plan for Belmont still has miles to go to see it realized, as thus far, there's no political agreement in place to allow VLTs at Belmont.  Mainly, this is due to the opposition of New York's powerful Assembly Speaker, Sheldon Silver.  Yet, Gov. David Patterson is apparently on board for Belmont gaming, as are various Long Island state reps. from both parties.  At this point, it would take at least 10 months to to develop an RFP for the site, and the current economy could certainly affect development. 

However long the delays, I would be somewhat surprised if Silver holds out in the face of budget deficits and his own party's legislators from the area.  In a few years, New York's Long Island (including Queens) may  have three major casinos (Aqueduct, Belmont & Shinnecock), all within an easy train, bus, boat or car ride from the greater NYC area and southern New England.  Yet again, New York plows ahead -- well on its way to becoming a gaming powerhouse in the mid-Atlantic.