Blood-Horse – 6/27/16

The operator of the video lottery terminal casino at Aqueduct Racetrack plans a December groundbreaking on an expansion project expected to add more than 750,000-square-feet to the facility, but the plan hasn’t been presented to the New York Racing Association.

The $400 million to be spent adding space for gambling, hotel rooms, retail, and entertainment areas was announced at the June 27 NYRA Franchise Oversight Board meeting. Genting New York said final approval is needed by the state, and that preliminary designs have not yet been presented to local officials for their input.

Ryan Eller, president of Resorts World Casino New York, told the board the project is the first phase of a larger master plan to turn the Aqueduct site into a “fully integrated resort.” When that might occur was not disclosed.

The development plan could allow Resorts World to position itself for when, or if, New York awards licenses for full-blown commercial casinos in the downstate market. Such licenses, three of which have been given to upstate casinos now under construction, allow for real slot machines, instead of VLTs, and table games.

Eller told the Franchise Oversight Board that monitors NYRA finances the plan has not yet been presented to NYRA, which operates racing at Aqueduct in Queens.

“We certainly would be willing to talk to NYRA about that,” Eller said after a question was raised about the lack of NYRA’s input in the expansion. A board member also wondered about impact on purses if the Resorts World plan fails, as well as disruption to racing during construction that is expected to last until the spring of 2019.

Eller acknowledged that if the Aqueduct market doesn’t grow as expected under the expansion there “could be a negative impact on purses.” Eller also said there could be “significant negative impact” on the Aqueduct casino—part of its revenue goes to purses, breed development, and NYRA—if New Jersey legalizes commercials casinos in the northern suburbs near New York City.

He said the expanded casino at Aqueduct would “only make us more competitive and help to offset some of that impact.” New Jersey voters in a fall referendum will be asked if casinos should be located beyond Atlantic City to areas in northern New Jersey.

Resorts World now averages about 25,000 gamblers a day and the 5,500 VLTs bring in between $430 and $440 in daily win-per-machine revenue.

The board June 28 approved a refinancing plan between the casino company and a group of syndicate investors through Wells Fargo. A state official said the refinancing totals $450 million.

New York earlier this spring approved a deal that will permit Resorts World to host 1,000 VLT machines on behalf of Nassau County Off-Track Betting Corp. The OTB corporation for several years had tried, and failed, to get a location for a VLT facility somewhere within the Long Island county’s borders.

The agreement gives at least $43 million to Nassau OTB in the first three years, along with additional capital funding sweeteners for Genting. Eller said the expansion would accommodate the 1,000 VLTs in the deal with Nassau OTB and perhaps more “if we have the opportunity.”