State Denies Gaming License to AEG

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Aqueduct Entertainment Group is the latest company to be denied a license to operate gambling machines at the Aqueduct racetrack in Queens. Karen DeWitt reports from Albany.

REPORTER: The controversial company is the focus of a federal investigation and two major partners have already withdrawn: The former congressman and Queens Minster Floyd Flake, and the rapper Jay-Z. Governor David Paterson, who was instrumental in choosing AEG, has now recuesed himself from the matter saying he has done so on the advice of his criminal defence attorney.

The rejection of AEG means the state has an additional $300 million hole in its budget since lawmakers have been counting on the revenues from the slot like machines that they had authorized for the Aqueduct Racetrack. In a statement, Paterson says the new bidding process needs to be done in an expedited, transparent and apolitical manner.