HARNESS TRACKS OF AMERICA Executive Newsletter

HARNESS TRACKS OF AMERICAExecutive NewsletterA daily fax and e-mail report on racing and gaming developments in North America and beyondStanley F. Bergstein, EditorWednesday, January 13, 2010PANEL SAYS NO IN DELAWAREFive of six members of Delaware’s Sports andVideo Lottery commission have overruled a paidstudy and recommended that no new casinos bebuilt in the state. The decisive decision came despitea report that had been commissioned andprepared by a New Orleans consulting firm thatsaid two new venues would raise state revenueand not put Delaware’s three existing racinosout of business. The sports commission thoughtotherwise, several members insisting that anyfinancial harm to the existing track operationswas unacceptable. The majority sent the paidstudy to the legislature on its first day, addinga contradictory footnote that read in part thatthe commission “concludes that it opposes thede facto finding in the report that would recommendtwo additional video lottery facilities, dueto the potential job losses, not-withstanding anynet job gains, (and) the potential damage to thehorse racing industry and destabilization of thethree current video lottery facilities.” The legislature,in a session that adjourned last June 30,approved table games for Delaware, but left unfinishedthe business of how they would be runand regulated. That matter will be resolved inthe legislative session that began this week. TheHouse majority leader, Pete Schwartzkopf, andgovernor Jack Markell and his key departmentheads favor new casinos, presaging lively debateahead.The same is true in Kentucky, where Senatepresident David Williams filed a constitutionalamendment this week that would require anytype of expanded gaming be submitted to astatewide referendum by voters. His bill, SenateBill 2, would eliminate the possibility of slots attracks being permitted by state statute. Trackslots were approved by the House lastsummer, but the measure died when aSenate committee killed it.JUDGE SAYS NO TO BIG BANKA federal judge made short work of a lawsuitfiled by Wells Fargo Bank against the Lac duFlambeau tribe in Wisconsin. The bank chargedseveral violations of an agreement signed withthe tribe a year ago and asked the court to appointa receiver to overlook provisions agreedto by the tribe in relation to bondholders. Thetribe defaulted last month on $50 million worthof bonds purchased by Saybrook Capital of California,that were issued with Wells Fargo as thebondholders’ trustee. The Indians’ responsewas that appointing a receiver would constitutea management contract, which would have requiredapproval by the National Indian GamingCommission, which never was issued. U. S. judgeRudolph T. Randa, in a one-page ruling, agreedwith the tribe and declared the agreement betweentribe and bank two years ago to be a managementcontract, that without NIGC approvalwas null and void. Marilyn Neuburger, a financialanalyst who specializes in Indian gaming forFitch Ratings, told the Milwaukee Journal-Sentinelthe case would be watched closely because ofthe chilling impact it could have on other tribeshoping to tap the bond market. “Having noability to enforce collection of a bond debt is anightmare for investors,” she said. “It’s sort ofan investor’s worst-case fear.”DRAZIN TO NJ COMMISSIONAs one of his final acts as outgoing governor, JonCorzine appointed thoroughbred owner and attorneyDennis Drazin to the New Jersey RacingCommission, reportedly to be chairman. Drazinhas served both as counsel and president of thethoroughbred horsemen’s association in NewJersey, and has clashed with the commission inthe past. He also received the Sports and ExpositionAuthority’s Buddy Raines award for meritoriousservice to New Jersey’s thoroughbredindustry, and races his horses at MonmouthPark and the Meadowlands.