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
REJECTION AGAIN IN ILLINOIS
The Illinois Gaming Board has rejected a $330
million offer from Emerald Casino Inc. to settle
the dispute over the company’s stalled effort to
open a casino in Rosemont, according to the Chicago
Sun-Times. Emerald asked the Board to let
MGM Mirage buy out Emerald for $615 million,
with $330 million from those proceeds to be paid
to the state, and operate a casino in Rosemont.
“We expected that the gaming board would reject
the $330 million offer and then there would be further
negotiations,” Larry Suffredin, one of MGM
Mirage’s attorneys told the Sun-Times. Gene
O’Shea, spokesman for the gaming board, said the
state agency will continue to negotiate with Emerald.
The effort to open a casino in the Chicago suburb
appears headed to an appeal before an administrative
law judge.
CASINO COULD PAY $1M FINE
Belterra Casino could face more than $1 million in
fines and possible probation following complaints
that the Ohio River casino arranged for prostitutes
to entertain wealthy gamblers, according to a report
in the Merrillville Post-Tribune. The Indiana
Gaming Commission held a hearing on the allegations
Monday at Harrah’s Casino in East Chicago.
Jack Thar, the commission’s executive director,
said a company official brought prostitutes from
California on his private plane for a golf outing
last June. Belterra is owned by California-based
Pinnacle Entertainment. Company officials reportedly
offered to pay $1 million in fines to settle the
complaint, but Thar suggested the final deal would
be more expensive an could involve probation for
the casino. Belterra, which opened in October
2000, is one of seven casinos owned by Pinnacle.
The investigation by commission staff and the Indiana
State Police came in April after two
female employees alleged that a casino
official told them to entice wealthy men on a
May 16, 2002
golf outing into the casino. They said the casino
provided the golfers with eight to 12 prostitutes.
The gaming commission also Monday gave tentative
approval to an agreement that will force
Pinnacle’s founder and former chairman, R.D.
Hubbard, to pay a $740,000 fine and give up his
license to operate a casino in Indiana. Pinnacle
underwent a management shake-up last week in
which Daniel R. Lee replaced both chief executive
officer Paul Alanis and Hubbard.
VERNON DOWNS BOARD GAMES
Six board members appointed by Las Vegas investor
Shawn Scott, who recently loaned the track
$8.5 million, were asked by the state to vacate their
positions. According to SEC filings and racetrack
President Justice Cheney, directors were asked
to vacate their positions because of an order that
was slapped on the track concerning Scott. A release
from the state’s Racing and Wagering Board
stated that participation by individuals or entities
associated with Scott would result in termination
of the temporary license granted to Vernon in
April. On July 6, the racing board will announce
whether or not they will grant Scott a license to
operate racing and gaming facilities in New York
based on the results of their investigation of him.
“We will not fill the vacancies until the racing and
wagering board makes a decision whether to license
Scott or not,” Cheney told the Oneida Dispatch.
In other news from the Empire State, a plan for
the state to give racetracks a greater share of proceeds
from VLTs is collapsing in state budget talks,
according to an article in the Buffalo News.
Sources close to the negotiations said the sides in
the talks could not decide from which pot of funds
the proposed additional five percent in revenue to
tracks should come.