Long Island's Nassau County is transferring its authority to install 1,000 video lottery terminals to Resorts World Casino at Aqueduct Racetrack in Queens under a provision in the 2017 New York State budget approved Friday.
The deal ends a bid by Nassau Regional Off Track Betting to open its own video lottery operation at Belmont Racetrack in the Nassau County community of Elmont, where it faced community opposition.
Under the transfer, Nassau OTB, struggling to stay afloat with roughly $12 million in debt outstanding, is expected to receive at least $43 million over the next three years with "a steady income stream" then heading to the county, according to officials for the agency.
The Nassau OTB filed a default notice Monday for failing to make payments owed March 22 on its Revenue Anticipation Note-Series 2014B offering. The notice says that Nassau OTB is in the process of "negotiating a Forbearance Agreement with the sole Noteholder."
Great Neck, N.Y-based Capital Markets Advisors, the financial advisor on the Series 2014B transaction, referred comment to Nassau OTB when asked who the noteholder was and for additional details.
“We are currently negotiating with our noteholder to arrive at an agreement that will satisfy our obligation,” said the statement from Nassau OTB. “ We are confident that we will reach an agreement in this regard. “
Under the state budget provision, Nassau OTB will receive annual payments from Genting Group, the operator of Resorts World Casino, that equal the revenue OTB projected its Nassau VLT facility to generate at Belmont. Genting will provide Nassau OTB with $9 million in both 2016 and 2017, $25 million in 2018 and then increase to a $25 million payment by the cost of inflation starting in 2019.
"This agreement is the best case scenario for Nassau County and its residents; receiving substantial, recurring revenue while ensuring that a VLT facility will not be opened in Nassau County," said Martins in a statement. "Residents who were concerned about a VLT facility affecting their community or seeing the County cut services because this revenue never materialized don't have to worry about either under this arrangement."
Nassau OTB first planned to open a "mini casino" at a vacant commercial building at the Source Mall in Westbury before abandoning plans in February 2015 due to mounting protests. The agency then announced in December its proposal for Belmont Racetrack before running into more resistance from concerned residents there.
New York Gov. Andrew Cuomo signed a 2013 bill that allowed Nassau and neighboring Suffolk County to build one VLT facility each with a maximum of 1,000 machines. Nassau officials estimated that the mini casino would generate up to $20 million in annual revenue. Nassau County Executive Ed Mangano included $20 million in anticipated revenue from the OTB facility as part of his $2.95 billion 2016 budget.
Nassau County is rated A2 by Moody's and A by Fitch Ratings.
