2002 - Harness Tracks of America, Inc.

HARNESS TRACKS OF AMERICA
Executive Newsletter
A daily fax and e-mail report on racing and gaming developments in North America and beyond
Stanley F. Bergstein, Editor
CITIBANK
TO BLOCK ’NET BETS
Citibank, the nation’s largest credit card issuer,
said Friday it has joined New York Attorney General
Eliot Spitzer in signing an agreement to block
Visa and Mastercard consumer credit transactions
that are identified by those two companies as involving
Internet gambling. “The steps required
to block those transactions are not in place,”
Citibank spokeswoman Maria Mandler said.
Citibank said it wanted to “help alleviate concerns
raised by the Attorney General about the impact
gambling on credit may have on New York residents.”
Spitzer said the agreement would reduce
illegal, underage and potentially addictive Internet
gambling. Blocking online gambling transactions
will be applied to all states, not just in New York,
Spitzer added. Other companies such as Bank of
America, Chase Manhattan Bank and MBNA also
started their gambling transactions, he said. As
part of the agreement, Citibank will contribute
$400,000 to one or more nonprofit organizations
that provide gambling counseling and related services,
Mendler said. Bank of America has been
blocking authorizations that can be identified as
Internet gambling since July 2001, said spokesman
Brad Russel: “It’s strictly a liability and risk
management issue. It’s too much of an exposure
to the bank to allow” online gambling transactions.
It is unclear at this time how Citibank’s decision
might impact pari-mutuel account wagering operations
located in the U.S. and offshore.
BANKR
ANKRUPT
UPTCY FOR EMERALD?
Officials in Rosemont, Illinois, on Thursday asked
a federal judge to declare the troubled Emerald
Casino bankrupt and set in motion a liquidation of
Emerald’s assets, including its state gambling license.
The winning bidder, village officials hope,
would be allowed to run a casino, subject
to Illinois Gaming Board approval, with
June 17, 2002
proceeds from the bankruptcy sale going first to
Rosemont – which built a parking garage for the
casino – and four other creditors to which Emerald
owes $46.7 million. The filing last week by of
the “involuntary bankruptcy petition” with federal
Judge Susan Pierson Sonderby stopped an administrative
hearing called to decide if the Gaming
Board was wrong to refuse to renew Emerald’s
casino license in January 2001. Emerald has 20
days to respond to the petition. Judge Sonderby
could hold a hearing and rule on the petition in the
next four to six weeks.
DEAL ON TAXES IN IOWA?
A?
Iowa gambling industry leaders say they are willing
to make a deal to settle the state’s racetrack
and casino tax problem. “We want to be sensitive
to the state community, so I don’t think anything
is off the table,” Thomas Flynn, a lawyer for Prairie
Meadows Racetrack and Casino told the Associated
Press. A split Iowa Supreme Court on
Wednesday struck down a state law that taxes landbased
casinos like Prairie Meadows at a higher
rate than riverboat gambling operations (see HTA
Executive Newsletter of June 12). The change is
expected to cost the state $38.7 million in reduced
racetrack taxes for the fiscal year beginning July
1. As it stands now, the state may be forced to
refund nearly $110 million in excess taxes that
racetrack casinos in Iowa had paid since 1997.
Prairie Meadows and Bluffs Run Casino and
Greyhound Park are expected to receive $49 million
in repayment, while Dubuque Greyhound Park
and Casino may receive about $11.5 million. Jerry
Crawford, an attorney working for the Iowa Greyhound
Association said it’s possible that the tracks
and state will settle the issue before it ever reaches
the district court. Prairie Meadows has paid the
most taxes of the 13 racetracks, riverboats and
casinos.