Delaware North has dropped out of the bidding for a major casino at a downstate racetrack, telling state officials in the State Legislature that there are too many uncertainties about the project and the potential financial conditions.
The privately held Buffalo company for years has eyed the casino proposal at Aqueduct Racetrack, which would give the company access to what would be the only casino located in New York City.
The company in 2008 won a previous bidding round for the casino, which would feature at least 4,500 slot machines and hotel and restaurant space. It had to drop out in 2009 when it could not come up with the $370 million it had proposed in an upfront payment for the state. The state Lottery Division runs the racetrack casino programs across New York.
The Aqueduct project has been stalled for a variety of legal and political reasons since being approved by the state in 2001. State officials anticipate it will bring at least $1 million a day in revenues to the government.
"Vendor procurement structure as proposed makes it impossible for us to submit a conforming proposal," Delaware North Companies Gaming & Entertainment President William Bissett said.
Bissett cited a number of "risks, including an unknown amount of time by the state to complete environmental reviews of the site."
But sources said the company is citing a "highly unusual set of financial conditions" for dropping out. Delaware North is raising concerns that, if selected, it will have to pay a nonrefundable $300 million payment to the state even if negotiations to close the contract are broken off because the terms are not good for the state.
The company is also concerned that the state takeout on the slot-machine revenues could change over the next 30 years -- the life of the contract -- making it difficult to predict success for the project.
Also, there is uncertainty, given the state's deficit, about a promise by the state to provide $250 million in bonding help to build the casino.
In addition, a Long Island Indian tribe is mulling opening a casino a dozen miles away at another racetrack, which would dilute the business at Aqueduct, Delaware North officials told state officials.