Aqueduct Racino Group Goosed Numbers to Win Contract (Updated)
The Aqueduct documents are out -- some released by Governor Paterson, some by the winners of the Aqueduct racino contract, AEG -- and it appears that, during the bidding process, AEG kept goosing its upfront payment offer and predicted profitability until it qualified for the win.
"Our previous WPU numbers were very conservative and were baseline for budgeting purposes," says one AEG document from September. "We believe these [new] numbers more accurately reflect the market conditions and revenue potential that our group can bring to the State."
As AEG has some connections with politicians, the presumption is that something funny is going on. The deal is being scoped by the state inspector general.
The skeptical Post says the state should have picked a partner with more solid financials than AEG, bid numbers notwithstanding. They find a gaming analyst who says that of the competitors, "Penn National Gaming probably had the strongest financial backing." (
Penn Competitor Delaware North crapped out of their contract back in March of 2009, saying it didn't have the $370 million the state originally asked for up front*.)
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Paterson's office insists there were all sorts of factors that played into their decision -- including "community support" and "minority- and women-owned business involvement," which will probably not appease folks who mainly wish to see the thing make as much money as possible for the state out of the poor fish who choose to feed their gambling addiction with it.
The Governor's office also says AEG was quickest on the draw, promising to have 3,000 video lottery terminals up and running in six months.
AEG is supposed to deliver $300 million to the state by March 31st. "If they think they can do that," an Albany source tells the Thoroughbred Times, "God bless them."
*Update: The bidder that couldn't come up with the $370 million was wrongly attributed and has been corrected.
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