Federal Investigation to Probe Jay-Z Racino Venture
Jay-Z’s relationship with NY Governor David Paterson is one of the points of interest in a federal investigation into AEG’s multi-billion dollar deal for the Aqueduct Race Track racino.
The issue revolves around whether the bid selection process was unethical. Questions have arose following AEG’s successful bid since they courted Jay-Z, a good friend of Gov. Paterson, several months before the racino selection was completed.
Last month, Governor Patterson awarded AEG (Aqueduct Entertainment Group) with the contract to upgrade the existing Aqueduct Race Track venue, the only one located within the New York City limits.
The new state of the art gaming site will boast 4,500 video slot machines.
AEG chairman Richard Mays first approached Jay-Z last September, following the rapper’s press conference with Gov.
Patterson announcing plans for a 9/11 tribute concert at Madison Square Garden.
The two parties agreed to a deal that awarded the rapper a 7% stake in AEG through his company Gain Global Investments Network LLC.
According to the NY Post, Jay-Z originally planned to come in on the racino deal in spring 2009 with casino tycoon Steve Wynn, who was told by Gov. Patterson that his team needed to secure a minority partner to make their group more attractive.
Wynn decided to withdraw his bid, which allowed AEG to court the Roc Nation mogul. In a statement, AEG flatly denied accusations that their Jay-Z deal was done to gain favor with Gov. Paterson.
Instead, company spokesman Jonathan Rosen pointed to Jay-Z’s worldwide visibility and New York popularity in particular as the main reason for offering the rapper a 7% company stake.
"Given [Jay-Z's] superstardom and his long and deep connection to New York, the partners thought he could bring a unique perspective to shaping a facility that would truly be an entertainment destination," Rosen explained to the NY Post. "The partners were looking to bring in someone who could bring marketing and community advice to the team."
A representative for Gov. Paterson also dismissed the scrutiny as baseless.
"There is absolutely no relationship between Governor Paterson's friendship with Jay-Z and the choice of AEG,” said a spokeswoman.
At press time, Jay-Z is in the midst of his nationwide 2010 Blueprint 3 tour.