Aqueduct Entertainment Group was scratched yesterday.
Gov. Paterson’s office withdrew its support from AEG’s plan to operate 4,500 video slot terminals at Aqueduct Racetrack following accusations of a rigged selection and relaunched the bidding process.
“The Division of the Lottery has concluded that it cannot issue a gaming license to [AEG],” Paterson’s office said in a statement.
The statement said the office wants a new bidding process that is “transparent” and “apolitical.”
The governor’s aides are proposing that the Lottery Division solely oversee the new procurement process and select the best bid for a “racino” by year’s end. That would cut Paterson and legislative leaders out of the process.
There were four losing bidders — SL Green/Hard Rock, Delaware North, Penn National and Peebles/MGM — and it was believed they would all be eligible to rebid.
Lt. Gov. Richard Ravitch told The Post yesterday that the governor’s office “doubted” any new bidder would be able to put up the $300 million licensing fee.
The losing bidders were thrilled to be back in the race.
“We have already fulfilled all of lottery’s licensing requirements, and we remain able to deliver on our promises,” SL Green CEO Marc Holliday said.
State and federal authorities are investigating claims that political connections rather than merit spurred Paterson and legislative leaders to award the 30-year franchise to AEG.
Flags went up after an AEG partner and Queens power broker, the Rev. Floyd Flake, flirted with backing state Attorney General Andrew Cuomo over Paterson for governor.
A few days later, Paterson backed AEG and then met with Flake to seek his endorsement.
On the advice of his lawyer, Paterson recused himself from yesterday’s decision.
In the end, AEG was undone for repeatedly jettisoning investors when lottery officials raised concerns about them.
Flake and rap mogul Jay-Z bailed out as AEG investors this week after the Lottery Division warned they hadn’t submitted to extensive background checks.
“The lottery rejects AEG’s claim that certain individuals and entities should have been excused from the application requirement because they were withdrawing from or were being dropped by AEG,” a lottery official said.
State officials announced their decision just minutes after The Post reported on its Web site that AEG threatened to sue the state for pulling the plug on the project.
Additional reporting by Rich Calder and Maggie Haberman