Cuomo using high-powered gaming adviser
James M. Odato
Published 12:19 a.m., Monday, June 11, 2012
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LOS ANGELES - FEBRUARY 16: (L-R) TSA board member Ken Moelis, actress Jennifer Love Hewitt and TSA board member Jeffrey Kramer attend the Tourette Syndrome Association Champion Of Children's Award at the Regent Beverly Wilshire Hotel on February 16, 2006 in Los Angeles, California. (Photo by Michael Buckner/Getty Images)
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The Cuomo administration retained a high-powered consultant to help deal with Genting on the now-collapsed $4 billion convention project next to its Aqueduct racino, but gaming companies are worried about the state's new adviser.
In a contract handed out by the Division of the Lottery, Moelis and Co. began assisting the state in negotiations with Genting last winter, shortly after Gov. Andrew Cuomo touted the convention center as the primary economic development component in his State of the State address in January.
The contract, for financial advisory services, is capped at $50,000 and payments have not yet been made, a spokesman for the governor said. Lottery hired Moelis after its successful engagement for the government of Ohio where it helped extract $220 million in extra fees from Caesars and Penn National Gaming Inc. Moelis was paid $13 million for its Ohio efforts.
In New York, the firm, which has worked for Wynn and other casino companies, has a narrower assignment, Cuomo's aides say. Cuomo's people are using it to do preliminary analysis of the state's gaming operations and for advising on future and current racino and casino programs.
The company, based in Manhattan, is headed by Ken Moelis, a self-described devotee of Ayn Rand, author of the libertarian bible "Atlas Shrugged," according to a Bloomberg news feature on him in 2009. Moelis could not be reached. But Rand's dogma calls for one to pursue his own self-interests and achieve his own well-being.
Racino operators fear Moelis is angling for a contingency deal with the state that would allow it to get a cut of the huge fees it might get from those vying for casino licenses if the state legalizes Las Vegas-style facilities as Cuomo envisions. "The consultant is telling them that they can get hundreds of millions of dollars for the licenses," said Gary Greenberg, an owner of Vernon Downs.
James Featherstonhaugh, president of the New York Gaming Association, said Moelis' presence is fostering speculation. "The state is entitled to get advice from whoever they want," he said. "I would be concerned if a consulting group had some sort of contingency based on the nature of their advice."
Two people in the gaming industry know Moelis' people met with Genting's people. Cuomo last week declared that he isn't interested in doing business with Genting right now, despite its pledge to build the largest convention hall in North America at the state's Queens track, and despite its heavy lobbying and generous funding by Genting and its partners in the Gaming Association of a group that has benefited Cuomo, the Committee to Save New York.
Cuomo said he cut off the Genting deal after the company's representatives sought an exclusivity agreement for gaming in the New York City market, a term he felt was inappropriate. The company also had been demanding lower rates on its racino that opened last fall.
How much Moelis helped Cuomo turn his back on the convention center project is unclear, but the firm has substantial experience in handling major deals, such as the sale of the Hilton chain to Blackstone Group LP for $26.2 billion. Asked about its relationship with New York, Augusto Sasso, Moelis' senior vice president, said: "We don't comment."
jodato@timesunion.com • 518-454-5083 • @JamesMOdato
In a contract handed out by the Division of the Lottery, Moelis and Co. began assisting the state in negotiations with Genting last winter, shortly after Gov. Andrew Cuomo touted the convention center as the primary economic development component in his State of the State address in January.
The contract, for financial advisory services, is capped at $50,000 and payments have not yet been made, a spokesman for the governor said. Lottery hired Moelis after its successful engagement for the government of Ohio where it helped extract $220 million in extra fees from Caesars and Penn National Gaming Inc. Moelis was paid $13 million for its Ohio efforts.
In New York, the firm, which has worked for Wynn and other casino companies, has a narrower assignment, Cuomo's aides say. Cuomo's people are using it to do preliminary analysis of the state's gaming operations and for advising on future and current racino and casino programs.
The company, based in Manhattan, is headed by Ken Moelis, a self-described devotee of Ayn Rand, author of the libertarian bible "Atlas Shrugged," according to a Bloomberg news feature on him in 2009. Moelis could not be reached. But Rand's dogma calls for one to pursue his own self-interests and achieve his own well-being.
Racino operators fear Moelis is angling for a contingency deal with the state that would allow it to get a cut of the huge fees it might get from those vying for casino licenses if the state legalizes Las Vegas-style facilities as Cuomo envisions. "The consultant is telling them that they can get hundreds of millions of dollars for the licenses," said Gary Greenberg, an owner of Vernon Downs.
James Featherstonhaugh, president of the New York Gaming Association, said Moelis' presence is fostering speculation. "The state is entitled to get advice from whoever they want," he said. "I would be concerned if a consulting group had some sort of contingency based on the nature of their advice."
Two people in the gaming industry know Moelis' people met with Genting's people. Cuomo last week declared that he isn't interested in doing business with Genting right now, despite its pledge to build the largest convention hall in North America at the state's Queens track, and despite its heavy lobbying and generous funding by Genting and its partners in the Gaming Association of a group that has benefited Cuomo, the Committee to Save New York.
Cuomo said he cut off the Genting deal after the company's representatives sought an exclusivity agreement for gaming in the New York City market, a term he felt was inappropriate. The company also had been demanding lower rates on its racino that opened last fall.
How much Moelis helped Cuomo turn his back on the convention center project is unclear, but the firm has substantial experience in handling major deals, such as the sale of the Hilton chain to Blackstone Group LP for $26.2 billion. Asked about its relationship with New York, Augusto Sasso, Moelis' senior vice president, said: "We don't comment."
jodato@timesunion.com • 518-454-5083 • @JamesMOdato
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