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
MORE ON ARTHUR ANDERSEN
If you’ve had your fill of Arthur Andersen news,
our apologies, but the beseiged accounting firm
is in controversy again, this time in gaming circles.
Frank Fahrenkopf, the feisty president of the
American Gaming Association, used Andersen to
do an upbeat study of legalized gambling. When
the Rev. Tom Grey, executive director of the National
Coalition Against Legalized Gambling,
found out about it, he fired all barrels.
Fahrenkopf quickly replied, “Our opponents
have been known to take shots at us without substance
in the past. When the light of day shines,
we always tend to come out on the proper side.
If anyone wants to challenge the accuracy of this
report, show us where it is inaccurate.” Grey
said the report was flawed for two reasons. First,
he noted that the Andersen firm is a member of
the American Gaming Association, and the study
reflects an in-house view of the casino industry.
Second, the study does not include a cost-benefit
analysis, because it shows only gambling’s upside
and none of its downside. Grey said he was
“glad to hear Frank defend the study, because
it’s not a smoking gun for us. It’s live ammunition.”
Arthur Andersen declined to comment.
The Las Vegas Review-Journal said the company’s
Las Vegas representative, who was overseer on
the project, did not return calls, and a spokesman
in the Chicago main office said, “We refer
questions like that back to our clients.”
JACOBS FAMILY SOLIDIFYING
In a move that takes other shareholders out of
the picture, the Jacobs family of Cleveland has
merged Black Hawk Gaming & Development
with Gameco, Inc., effectively privatizing the
operations. The move faces two shareholder
lawsuits, but Stephen Roark, head of
Black Hawk, says when the smoke clears
two casinos in Colorado, one in Reno, Colonial
Downs in Virginia and
February 7, 2002
truck stops with VLTs in Louisiana all will be
under one Jacobs-owned umbrella.
NEW CHAIRMAN IN INDIANA
In a move that caught all parties by surprise, and
with ramifications still unknown, Gov. Frank
O’Bannon of Indiana suddenly announced he has
appointed Richard (Pete) Beck, a member of the
Indiana Horse Racing Commission for five years,
as chairman, replacing Nick Stein, who remains
a member. The governor’s office declined to say
why the switch was made. Beck, a former harness
horse owner, served in the Indiana House
for seven years, from 1987 to 1994. O’Bannon
said of Beck, “As a veteran member of the commission,
Pete understands the challenges facing
breeders and racers. He also understands what
the public wants.”
BIG PROBLEMS IN HONG KONG
Thoroughbred racing in Hong Kong, often looked
at as a model of what the sport can be, is having
some serious problems. While the numbers are
still huge, betting declined by $200 million U.S.
dollars in the first half of the current racing season,
and now a major scandal has rocked the
sport. Two jockeys and 16 other people, including
employees of the Hong Kong Jockey Club,
have been arrested for allegedly accepting bribes
to fix races for an illegal gambling operation, according
to Deutsche Presse-Agentur. The arrests
came after a raid at the Happy Valley track by
officers of the Independent Commission Against
Corruption. The agency said the two jockeys and
four other racing club employees were accepting
‘advantages’ from an illicit bookmaking operation
to supply stable racing information and
manipulate race results. The four employees were
two exercise riders, a racing registry assistant,
and a clerk. An illegal bookmaker, a saleswoman
and 10 civilians also were arrested.