State officials refused to grant a gaming license to the politically-connected consortium selected by Gov.Paterson to open a casino at the Aqueduct Racetrack—meaning the company will not install slot machines at the Queens facility or receive the lucrative contract. "The Division of the Lottery has concluded that it cannot issue a gaming license to Aqueduct Entertainment Group. Therefore, the State has officially withdrawn its support for AEG," the governor's office wrote in a statement. more ›

More trouble with the racino project in Queens, this time involving Paterson’s bud Jay-Z who also has stakes in the Aqueduct Entertainment Group, the company that's set to run slot machines there. According to the Post, AEG—the group that was controversially awarded the multi-billion dollar deal to run slot machines—was going after Jay-Z as an investor when he and the governor were just becoming friends. Now, some question whether it courted Paterson's pal to make its bid for the project more appealing. more ›

Federal investigators are trying to convince the casino operators who were snubbed by Gov. Paterson in favor of a politically-connected bidder to cooperate in a probe of the Aqueduct Racetrack deal. "The [Manhattan U.S. Attorney's office] said, 'We're contemplating a further inquiry into the racino bid process: If we go ahead with that, would you guys be willing to cooperate with us?'" a bidder, whose company's slot machine plan was rejected, told the Daily News. "We said that it wasn't much of a process, but, yes, if you ask us to, of course we'd cooperate." more ›

Just as the Times's rumored bombshell fizzles, sources say feds are investigating the Queens Racino deal that had Paterson “gnashing his teeth” this week. They want to determine if, by awarding a valuable gambling contract to a politically connected company, Gov. Paterson was angling for the support of influential ex-congressman Rev. Floyd Flake. Flake owns a .06% stake in Aqueduct Entertainment Group, which by running 4,500 video slot machines at a South Ozone Park racetrack, stands to make $180 million annually. "The entire matter stinks to high heaven to put it very bluntly," said Sen. Frank Padavan, a Republican from Queens. more ›

Speculators say the NY Times's Paterson scoop has to do with drugs, swinger parties or some combination of the two, but as scandals pile up, it seems like the news could have to do with 4,500 video slot machines planned for a racetrack in Queens. In a move that by some accounts "smacked of favoritism" Gov. Paterson awarded the project to a company that operates a shabby casino in Elko, Nevada. Now, sources say, Paterson is "paranoid" and lashing out at aids over the corrupt-looking gambling deal. According to one insider, "He sits gnashing his teeth, looking around for scapegoats among the people around him. He's lecturing them, launching into tirades, and he's demoralized the entire staff in the process." more ›

After years of warnings, the city's Off Track Betting business may be out of luck as Mayor Bloomberg said the city may pull its funding and let the gambling business close. He told the OTB Board of Directors, "The City simply cannot take dollars away from schools and hospitals to pay for a gambling operation. We have no business subsidizing betting parlors at the expense of City taxpayers, particularly at a time when we're asking all agencies to cut their budgets." And what's more, the board agreed and approved the shutdown! more ›