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New York racino project nearing fruition

KUALA LUMPUR: As shareholders ponder over the upcoming EGM, Genting Malaysia Bhd’s (GenM) plans to enter the US market are nearing fruition.

The New York State governor’s office announced on Tuesday that Genting Malaysia unit Genting New York LLC (GenNY) has secured most of the necessary approvals for its bid to operate the 4,500 video lottery terminal facility at the Aqueduct racetrack in New York City, just 1.5 miles from JFK International airport.

GenNY has obtained the approvals of the Governor of New York David A Patterson, Senate Conference Leader John Sampson and Speaker of the Assembly Sheldon Silver, but it still requires the review and approval by the Attorney General and the State Comptroller.

GenM also confirmed the statement by the governor’s office in an announcement to Bursa Malaysia yesterday. The deal also requires a decision by a state judge on a case brought against the state by the disqualified former winning consortium of a previous round of bidding.

However, Malaysian analysts said with the two major members (the Clairvest Group and Navegante Gaming) of the former consortium having pulled out of the lawsuit, the decision was likely to be in favour of the state.

GenM has emerged as the sole bidder following the disqualification of two others. The concession will run 30 years, with an optional 10-year extension.

But a source has cautioned that Genting group would not proceed until all such approvals or decisions are finalised.

GenM is expected to make an initial investment of about US$730 million (RM2.3 billion), consisting of a US$380 million upfront licensing fee and an initial capital expenditure of US$350 million. The entire project will cost US$1.3 billion if it includes a proposed hotel and theme park under the longer-term plan.

However, it is learnt that GenNY will receive a grant of about US$250 million from the state, thereby reducing its cost outlay in the project, and under its proposals, the group promises the state an annual tax revenue of at least US$500 million.

The company’s proposal includes naming the facility as Resorts World New York and in the initial phase, 4,500 electronic slot machines or video lottery terminals, a three-storey atrium with a water show and an enclosed skyway pedestrian bridge linked to the mass transit system of New York.

Under the preliminary phase, the racino will be equipped with 1,600 video lottery terminals six months after approval is obtained.

The Genting group had previously invested and helped kick-start the Foxwoods Casino Resort in Connecticut during the 90s and has interest in the Seneca Niagara Casino in Niagara Falls.
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