[NYguy]

http://www.nytimes.com/2010/03/15/ny...l?ref=nyregion

Bidders Lined Up for a Casino in the Future

By RUSS BUETTNER
March 14, 2010

With Albany’s dysfunction searing their fortunes and reputations, why is the same small group of companies insistent on trying to build and run a slot machine casino at a rundown racetrack in southern Queens?

There is the obvious and immediate allure of revenue from the 4,500 video lottery terminals, or V.L.T.’s at Aqueduct racetrack, which could gross several hundred million dollars in their first year. Those are enticing numbers on their own. But the greater attraction may be the potential down the road: the gold-plated possibility that the state is on a path toward further legalization of gambling.

“V.L.T.’s are usually the first step,” said Michael G. French, who oversees the gaming advisory practice at PricewaterhouseCoopers in Philadelphia. “Then as the market matures, you say, ‘What do we do now?’ ”

Privately, several bidders have made clear that legalization is where they see things headed. And having a licensed casino, albeit a limited one, in the state’s greatest population center would provide a leg up should that day come.

...Many state governments watched with envy the revenue flow that some states enjoyed from Indian casinos. Connecticut has collected $5 billion from the state’s two casinos since they opened in the 1990s. Several states — including Iowa, West Virginia, Indiana and Maryland — responded by approving the installation of video lottery terminals, typically at racetracks.

“You then have established that you can have V.L.T.’s without the sky falling, without cannibalizing neighboring businesses or increasing crime,” said Joseph M. Kelly, a professor of business law at Buffalo State College and an associate of the Catania Consulting Group, which specializes in gambling issues. “You will also have increased tax revenue,” he added, “and believe it or not, that is attractive to many legislators.”

A few states, including Delaware and Pennsylvania, have taken the next step of approving table games, an expected boon to state coffers and to the companies that run the casinos.

Competition for gambling dollars could prove a powerful motivation at Aqueduct, with casinos in Connecticut, Atlantic City and Pennsylvania a short trip away. But putting terminals there would no doubt face strong opposition from gambling interests in Atlantic City and from the operators of nearby Indian casinos, lest new sites draw revenue away.

...Another motivation that bidders have only hinted at is the potential for future real estate development on the vast Aqueduct site.