Bally Technologies appears to be the big winner in the decade-long effort to add a casino to New York City’s Aqueduct Race track.
The Las Vegas-based gaming equipment manufacturer has a contract through December 2017 to provide the market-share of the slot machinelike video lottery terminals used by New York’s race track casinos.
New York’s state comptroller approved a contract between the state lottery and Malaysia-based Genting to operate a slot machine-only casino at Aqueduct, an aging race track in the New York City borough of Queens.
Genting plans to open the casino in six months with 1,600 video slot machines and other electronic games. Genting has promised to spend up to $1.3 billion on the facility, which will be known as Resorts World New York.
The casino will have 4,525 VLT machines, two restaurants and a skybridge connecting it to the subway stop at Aqueduct.
Bally could provide more than half of the total gambling machines at Aqueduct. Analysts said the company has about 6,500 games in New York race tracks.
"Its current market share stands at 51 percent and the company believes they will be able to maintain their share through the Aqueduct opening," Macquarie Securities gaming analyst Chad Beynon told investors.
Roth Capital Markets gaming analyst Todd Eilers said Bally had not been counting on revenues from Aqueduct in any of the company’s forward looking financial projections.
"We estimate that 2,250 VLTs installed at Aqueduct will contribute (roughly) $15 million in annual revenue and 13 cents in recurring earnings per share (to Bally)," Eilers said.
Genting, which operates the Resorts World Sentosa project in Singapore, made a $380 million upfront payment to the state. New York’s governor and the legislature signed off on the deal, which has projections of $650 million in annual gaming revenues to the state.
The company believes Aqueduct can generate more than $1.5 million a day in tax revenue for New York.
"This is one of the most important vendor contracts New York has ever signed," New York Comptroller Thomas DiNapoli said in a statement. "It’s a 30-year license that carries the future of New York’s racing industry on its back."
The state has wanted to add a casino at the track since 2001. A deal with a Buffalo, N.Y.-based company fell apart in 2008 and bidding restarted.
Last year’s process attracted MGM Resorts International, Harrah’s Entertainment, Wynn Resorts Ltd., Penn National Gaming and the Florida-based Hard Rock Casinos.
A consortium that included Las Vegas-based casino operator Navegante Group won the deal but lost the contract six weeks later. State and federal authorities investigated the process and ties between one of the consortium’s partners and the governor.
Bidding reopened in May with the lottery running the show.
Contact reporter Howard Stutz at email@example.com or 702-477-3871.