Aqueduct owner Genting wants more of gambling take to fund convention center plan
Friday, January 20, 2012 - 05:47 PM
Governor Andrew Cuomo first officially announced the plans to build the nation’s largest convention center at the Aqueduct racino in Queens during his State of the State speech earlier this month. Since then, the Governor has pushed the plan as a no-cost winner for economic development.
“All the construction work would be done privately. The state wouldn’t put in a dollar. The state wouldn’t have to pick up a shovel. It would all be done by a private company,” Cuomo said yesterday after an even at Queens College yesterday. “What they want is additional racino machines.”
The racino machines are only part of the equation. Genting is also seeking a change to the rate it pays the state on gaming revenues to help make, as one Genting-associated person put it, “the convention center economically viable.”
The state’s lottery commission divvies up the take from electronic gaming machines that are legal under state law. Genting gives the state about 70 percent of the gross returns from electronic gaming at the end of the day.
While specific details on the agreement were unavailable, an example of the sort of situation Genting could be pushing for was given: Pennsylvania. According to a spokesperson for the Pennsylvania Gaming Control Board, similar gaming operations about 55 percent.
According to their spokesperson Stefan Friedman, the change in the front-end revenue agreement will result in a sizable financial benefit to the state down the road.
“We have to have a project here, and with a $4 billion private investment and no tax payer money there have to be business conditions, obviously, that are going to allow us to make this project feasible,” Friedman said.
He pointed to Resorts World Casino’s performance since opening in the fall was evidence enough of the economic gains the state could anticipate in the future: $90 million in revenue for state coffers, as well as the more than 1,500 jobs created. With the addition of more machines to Resorts World’s current license of 5,000 in the expanded convention center construction, the state would ultimately see even more revenue from gaming.
“I’d say we’re looking forward to working with the state, doing what we can and doing our part by financing this convention center, by potentially financing transportation out there,” Friedman said.
Additionally, multiple people close to the deal said the proposal would not affect the current agreement on the machines located at Aqueduct. This sort of agreement also isn’t new: other racino operators in the state have received adjusted rates to help expand their facilities.
In a letter to legislators earlier this month, noted Cuomo spokesman Josh Vlasto, the Governor alluded to the need for a new deal when he wrote:
[I]n each of the [video lottery terminal] racinos across the state, the state has, through legislation, negotiated a revenue sharing agreement and such an agreement would need to be negotiated here. Importantly, the new agreement would be binding only upon the new VLT terminal revenue which would be granted to the Aqueduct facility; while the terms and conditions of our original agreement remain in place.