Aqueduct: Penn got hosed

Despite its runaway hyperbole, this Empire State editorial makes a good point: The Aqueduct racino deal smells like a week-old fish and ought to be investigated. (It isn’t — but it should be.) Since all bids involved multiple players, sorting out the “best” candidate involves delving into a lot of companies with which S&G is unfamiliar. However …

A common denominator to all would-be ownership groups was the presence of a casino operator. The winner, Navegante Group is hardly a newbie to the business, having helped Galaxy Entertainment find its feet in Macao. But right now it’s mostly associated with rural Nevada casinos, and with trying to make a go of underfunded operations in downtown Las Vegas and at the Sahara. In both cases, tightwad owners Tamares Group and Sam Nazarian have locked their casinos into a slow death spiral and there’s not much Navegante can do but manage the ensuing decline.

More germane to Aqueduct, Navegante has no racino experience. Neither did rival MGM Mirage (nor did Steve Wynn, who realized that the fix was in and withdrew). Nor did the Seminole Tribe, which was bidding under the rubric of Hard Rock Entertainment. That leaves Harrah’s Entertainment and Penn National. Both run racinos and Harrah’s could install a much larger marketing engine. However, Harrah’s also has an oversupply of Atlantic City casinos (four) and a parimutuel in Chester, Pa., so Eastern Division President Don Marrandino might not promote the property as aggressively as Penn.

Besides, Harrah’s has developed a bad habit of toying with projects, then abandoning them for the next shiny object that comes along. Finally, Penn is better capitalized than Harrah’s — and who thought the day would ever come that one would type that statement? Heck, it was the only candidate to pledge $300 million in upfront money. (Navegante’s partners did, but only after some strong-arming from Albany.)

So if all other considerations are put aside and it’s purely a question of which operator’s resumé most closely measures up with the job at hand, the winner ought to be Penn and it shouldn’t even have been close. Peter Carlino, you got screwed and you have S&G‘s sympathies.

A bit to the south, both racino operators and lawmakers in Delaware are hustling to get table games into play ASAP. A significant motivator is the desire to siphon off players from the Philadelphia market. Enjoy your honeymoon, Delaware, because it’s going to be short. You’ve got a beautiful state but Pennsylvanians aren’t going to drive there once they can play 21 closer to home.

It’s a nippy day in Hell when S&G sees an anti-gambling editorial it likes. But Mike Hollis not only acknowledges his moral/societal objections to gambling in Alabama, he then sets them aside. What Hollis proceeds to do is make a very thorough takedown of legislation pending in Alabama that would legitimize the state’s non-tribal bingo parlors. He raises serious free-market questions, as well as others regarding how the potential tax revenues would be disbursed. Finally, showing that he’s a man of his word, Hollis proposes putting the whole kit ‘n kaboodle to Cotton State voters, in the form of a constitutional amendment.

Hollis makes substantive points I’ve not seen addressed elsewhere. And, given the crazy-quilt of laws that makes electronic legal in some Alabama counties (except when it isn’t), a constitutional amendment looks like the cutting instrument this Gordian knot requires.

Speaking of Hell … the increasingly infernal Fontainebleau saga now pits one bankrupt entity versus another. By the way, it’s become accepted wisdom that F-bleau is 70% finished. What evidence do we have of this? Neither the on-site photographs or video I’ve seen supports that claim. Also, in a KLAS-TV report on Carl Icahn‘s takeover of the property, completion time for F-bleau was estimated at 18 months … on a megaresort that was supposedly only six months from opening last April. Penn National projected that $1.5 billion was required to finish a property on which at least $2 billion has already been spent. None of this sounds like “almost there,” does it?