Industry News
Wynn in NY Horse Race
The race is on for chance to secure the contract to manage three of New York State’s most prestigious racetracks, and it looks like casino luminary Steve Wynn is throwing his hat into the competition. At stake is the right to run Saratoga, Belmont and Aqueduct racetracks for as many as 20 years, as well as a potential lucrative slot parlor to be located at Aqueduct. Aqueduct is in Queens, one of the five boroughs of New York City.
Wynn, the father of modern Las Vegas and CEO of the growing Wynn Resorts is looking to expand his growing company beyond Las Vegas and Macau. Now he has joined the investment consortium Excelsior Racing Associates. It’s a good thing too because one of the group’s founders, Steve Swindal, dropped out of the group last week after his wife (daughter of Yankee kingpin George Steinbrenner) filed for divorce.
The group also secured additional partners including Steven Roth of Vornado Realty Trust and Richard D. Bronson of The Bronson Companies. Though they all just Wjoined the group, they are scheduled later this week helmed by Governor Elliott Spitzer to present arguments as to why they should take over the potentially lucrative management of the racetracks. Excelsior also includes the Rev. Floyd Flake, a former congressman, and Jerry Bailey, a Racing Hall of Fame jockey.
Other bidders include Empire Racing, Capital Play and the embattled New York Racing Association, which filed for bankruptcy last November.
According to NYRA, which has run the tracks for more than 50 years, they were forcibly pushed into bankruptcy when the state government refused to approve a deal where MGM-MIRAGE would build a $180 million casino. NYRA is more than $300 million in debt and involved in a battle of wills with the state, which refuses to prop up the organization any longer by feeding it cash. The state provided NYRA with an $8 million loan last October in order to continue operations for the time being. Its contract expires at the end of this year.
The state wants the Queens casino to get off the ground as soon as possible since estimates say the state could bring in $300 million in taxes during the first full year of operation and up to $600 million in revenue once all slot machines are installed. The facility was originally to have opened this coming October, but since no agreement was finalized no construction has begun.
NYRA still believes it has a shot to win the deal because of its agreement with MGM-MIRAGE. A U.S. bankruptcy judge may approve NYRA's slot contract with MGM Mirage on April 23.
NYRA Trustee James Heffernan said they are the best ones for the operation. "The other bidders are rank start-ups," Heffernan said. "They have no history of working together. They could change overnight."
The state already has the Mighty M casino in operation at the Monticello Raceway in upstate New York and another at Yonkers raceway just north of New York City.
Now it’s up in the air as to who will operate the casino, which has incredible upside potential. A decision is expected to be made by the Governor before the end of May.
While he has no horseracing experience, Wynn is a casino industry magnate. He transformed the entire gaming industry when he introduced the Las Vegas mega-resort. That first property, The Mirage, has become the model for all future casino resort development that earn as much cash from amenities such as restaurants, shows and conference facilities as it does from the gaming floor. A successful mega-resort sees millions in cash flow per day. He later sold Mirage Corp for nearly $5 billion and has since gone onto create next generation casino resort product.
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