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
VERNON GETS TEMP LICENSE
The New York Racing and Wagering Board yesterday
issued a temporary 90-day racing and simulcasting
license to Mid-State Raceway, the parent
of Vernon Downs, which will enable the track
to open its season as scheduled on May 3. Although
the racing board staff expressed concern
about licensing pending further investigation,
board chairman Mike Hoblock said, “I think this
is the best we can do under the circumstances,”
adding that the track was “about a day” from being
closed down. The issues of concern included
the role of investor Shawn Scott and and regulatory
compliance issues involving him. Scott’s $8.5
million loan enabled the track to meet outstanding
obligations and kept it from losing its stretch turn
hotel.
Under the terms of the conditional license, Scott
and his associates are prohibited from being involved,
directly or indirectly, in the management
or affairs of Vernon, or of directly or indirectly influencing
its directors, officers or employees in
any way. Failure to comply with the conditions set
forth by the board, or derogatory information concerning
the licsensibility of Shawn Scott, the lender
entities or those individuals or entities associated
with the lender’s interests would result in termination
of the temporary licenses prior to July 6, 2002,
their ending date. Vernon president and CEO said
he had no complaints with the conditions, and said
that “if Scott wants to participate with Vernon
Downs, I’m sure he’ll cooperate in every way possible.”
SIMULCASTING TRIAL ENDS
Bowing to racing regulators’ view that cross-breed
simulcasting between Pompano and
Gulfstream Parks violated Florida law, the
two tracks ended their experiment yesterday.
Dick Feinberg, Pompano’s GM, said
racing fans were the biggest losers.
April 9, 2002
Both tracks plan to pursue the matter, seeking an
immediate review and “judicial resolution” of the
issue. Under the agreement, the two tracks were
exchanging their simulcast signals, and Feinberg
said the cross-breed simulcasting “has been enjoyed
by hundreds of racing fans who have appreciated
the convenience of watching and wagering
on thoroughbred racing at Pompano.” Pompano’s
daily simulcasts of other out-of-state thoroughbred
action after 6 p.m. is not affected by the ban.
SCHWARTZ CALLS FOR MERGER
Blood-Horse Interactive reports today that the
magazine has obtained a copy of a late February
letter sent by New York Racing Assn. chairman
Barry Schwartz to New York City mayor Michael
Bloomberg, saying a merger between New York
City OTB and NYRA “would have no downside”
and would make New York racing able to compete
more effectively against Magna Entertainment and
Churchill Downs, which NYRA considers competition.
According to Blood-Horse, Schwartz offered
to share excess profit above base numbers equally
with OTB, and said the idea would provide “substantial
budget relief to the city in the near term,
and enormous potential for long-term economic development
over the coming decades.” Schwartz
told the mayor that Magna, which thought it had
bought New York City OTB under the Giuliani
administration, and Churchill had a strategy of
“driving a wedge between NYRA and NYCOTB”.
He said New York was “in grave danger of losing
out leverage in the industry,” and that merger could
make New York “a dominant force in determining
the price for which races are bought and sold in
the simulcast market.” He said unions, which opposed
the sale of NYCOTB last year, would accept
a merger, and talked of “crafting a merger
that will be satisfactory to all concerned.”