This very recent article shows that the Mashpee effort is going no where as far as the investors and professionals are concerned. Genting is instead focused on killing the competition in it’s New York stronghold and that competition would be the “Great Shennacock Nation”….just recently recognized. Of course the chairman’s fondness for the New York Natives is admirable, but you can rest assured that the investors paying his salary, are working hard against his close friends, and if history offers any clue, Genting will do whatever it takes to maintain its gaming advantage and crush the Shennacock. Lovely group. We’re not trying to depress you, just keeping you informed.
Dickinson Wright PLLC Global Leaders in Law
United States: Tribal Casino And The Asian Global Giant: A Modern David vs. Goliath?
Article by Dennis J. Whittlesey
July 25, 2011
Genting is the Malaysian global gaming juggernaut that has been working on gaming projects within the United States for several years and finally appears to be on the verge of opening its first domestic casino before the end of the year. Yet, one of its top executives has just suggested that a tribal casino proposed for Long Island could wreck its plans for a major racino development at Aqueduct in New York City.
Colin Au is a senior executive of Genting New York LLC, the company that was selected to develop the Aqueduct facility which will operate under the name “Resorts World New York.” He also has been publicly identified for other company projects in the United States, including a sidetracked casino in Fall River, Massachusetts, in partnership with the Mashpee Wampanoag Tribe, after leading that tribe out of an agreement with the Town of Middleborough for a major casino resort development. But Mr. Au now is expressing serious corporate concerns that the Aqueduct project could be put out of business if the newly recognized Shinnecock Nation of New York opens a casino in Long Island’s Nassau County.
The Mashpee project seems to have been something of a diversion for Genting, since its most serious efforts to gain a foothold in the Unites States have been in the state of New York. Its latest and largest effort is the proposed development at Aqueduct which would include both the racino and a major convention center nearby under plans publicly announced by the company. Upon winning the competition for the Aqueduct contract, Genting made a $380 million upfront payment to the State for a 30-year contract period and an option for an additional 10 years. The racino component is already under construction.
Only last Monday, Genting Chief Financial Officer Christian Goode made a detailed presentation of his plans to the state Franchise Oversight Board at the State Capitol in Albany. In addition to major renovations to the existing facility, Goode unveiled plans to initially open the racino with 2,500 machines; earlier statements indicated an ultimate installation of 5,000 gaming machines producing some $380 per machine per day. That level of play would generate a drop of $1.9 million daily, or approximately $700 million annually. These estimates are based on the facility’s location, a glitzy resort-type development plan, and an affluent customer base in Long Island, Queens, and Brooklyn. The proposed convention center would only add to the total attraction.
Also addressing the Franchise Board on Monday, Mr. Au said, “Here is a place where many conventioneers can fly in for a day. Of course, this will be done with private money that is our money, not bonds.”
But Mr. Au then ominously warned the Board that Genting could be bankrupted by a Shinnecock casino on Long Island, expressing emphatic opposition to the proposed Long Island Indian casino. If such a casino is opened, he said, “It would be disastrous. We probably would have to close shop.” The implication was that the state would be the big loser in that case since the taxable revenues generated at Aqueduct would be permanently lost, as well as a commitment to pay 7 percent of revenues to the New York Racing Association and 1.5 percent to the breeding industry.
While Messrs. Goode and Au painted a rosy scenario for the state with development of a competition-free project, they then stated the bottom line to their message, which is that the State must refuse to negotiate a Tribal State Class III Gaming Compact with Shinnecock. Since such a compact is required under the federal Indian gaming law, a State refusal to enter into the agreement would foreclose the competition that Genting seems to fear.
It is a fact that a tribal casino could offer full casino games not permitted at the Aqueduct site, including blackjack, poker, and roulette – all are games that are extremely popular with the gaming public. In the face of that potential competition, Mr. Au flatly warned the Board to prevent it from becoming reality, “We are absolutely on a very different level playing field. It’s important for the Governor’s office to recognize they should enter into a compact [pursuant to the Indian Gaming Regulatory Act].”
Genting claimed to have been a great fan of Indian gaming a couple of years ago when it pried the Mashpee casino project away from that tribe’s original development partners – a project that appears to be in a state of permanent paralysis. Conversely, the company currently is telling Governor Andrew Cuomo that he must block any Indian gaming in New York. There might be some consistency to Genting’s attitude about Indian gaming, but the corporate spokesmen have not yet explained it.
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