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Scarborough, Penn National fail
to get ‘racino’ approval

Jan 6, 2004 4:58 AM

Scarborough Downs harness track in southern Maine and its partner Penn National Gaming Inc. (PENN) thought they could take advantage of a legal loophole to get into the video lottery machine business. But, townspeople thought differently.

Voters in the towns of Saco and Westbrook voted overwhelmingly against permitting the gaming interests from establishing racinos in their communities. Thus, the racing and gaming interests were left without a venue for their slot machines.

Maine’s slot machine law permitted racetracks to establish their slot machine locations within five miles of the racetrack. So, Scarborough Downs, rebuffed by a negative vote of the townspeople of Scarborough, turned to the nearby communities of Westbrook and Saco.

Nearly $1 million in advertising was spent by the proponents of the racino and their opponents, including Las Vegas gaming entrepreneur Shawn Scott who purchased Bangor Raceway from that community and is seeking a license to set up a video lottery operation at that facility.

Currently, the Maine law permits anyone with a harness racing license to get a slot machine license too. That provision of the law has to be changed, says Gov. John Baldacci who has asked his staff to rewrite the existing law permitting slots.

Baldacci says he believes Maine’s gambling laws are the weakest in the country and should be changed. In addition to the licensing change, he wants the lawmakers to approve the creation of a five-member Gambling Control Board to oversee the slots action; to limit the number of machines allowed at the tracks and to make sure the state doesn’t end up spending more regulating and policing slots that it gets back in gaming revenues.

Meanwhile, the Maine Racing Commission will continue its investigation of Scott and his application for a racing license for 2004.

Another wrinkle

The Illinois Appellate Court created a new wrinkle in the ongoing saga involving the Emerald casino license last week when it ruled that state gambling regulators were required to renew the company’s gaming license.

That was exactly opposite a lower court ruling that permitted the Illinois Gaming Board not to renew the license of the bankrupt riverboat. Emerald’s owners planned to move their operation to a site in Rosemont, a Chicago suburb.

The immediate impact of the court ruling was unclear since Illinois Atty. Gen. Lisa Madigan recently worked out a deal whereby Emerald’s owners were going to divest themselves of all ties to the license so that the state could place the license up for auction.

Left out of the Madigan deal was the Rosemont community whose leaders jumped on the appellate decision to insist that anyone buying the Emerald license would have to build in Rosemont.

State officials disagreed saying they expected to go forward with the Madigan deal.

Major merger

While U.S. investors awaited action within the gaming industry, Europeans were shocked to hear that two major companies were considering a merger that would establish France’s biggest gaming operator.

According to the French newspaper Le Monde, Groupe Lucien Barriere was considering a merger with gaming giant Accor Casinos. If it goes through, the merged company would control 35 casinos accounting for about one-third of the $3.18 billion generated annually by France’s 180 licensed gambling properties.

Currently, France’s biggest casino operator with a 27% market share is Groupe Partouche that occasionally is listed as offering to be a partner in some American projects.

A ”˜signal’ honor

While Magna Entertainment Corp. (MECA) continues to wage a simulcasting war with TVG and its principal backer, Churchill Downs Inc. (CHDN), the losers continue to be America’s horseplayers and the racing industry as a whole.

Magna announced last week that it would prohibit horseplayers from making wagers on any of its racetracks unless the bets were made through their company, XpressBet, or, at least in California, through the publicly traded Youbet.com Inc. (UBET).

Throughout the recently held Hollywood Park race meeting, TVG’s wagering system was the vehicle used by race players while all other account holders could view the live running of the races through TVG telecasts over Fox sports network. No live telecasts of Magna tracks are currently being offered.

Those affected hoped that intervention would take place through California racing authorities but so far nothing has happened.

Memories

While former Louisiana Gov. Edwin Edwards serves a 10-year sentence for gaming license extortion, some of his mementoes as the state’s chief executive have been turned over to the Louisiana State Museum.

Included in the donation, made with Edwards full approval, were such items as a matchbook from Caesars Palace, where Edwards often surfaced as one of the casino’s high rollers; invitations to the 1992 inaugural ceremony of Edwards’ fourth term as governor, and a pin reading, "I luv the Guv."

Despite his conviction, Edwards remains highly popular among Louisiana’s voters. In fact, many have been circulating a petition seeking to have him released on probation or completely pardoned.

Museum officials said they expect to have the 100 items on display when the museum’s 70,000-square foot Baton Rouge branch opens near the state Capital, sometime in 2005.

Checking salaries

Compensation being made to members of the Mohegan Indian tribe, operators of Mohegan Sun casino complex in Connecticut is under review by tribal members. Some tribe members have suggested that a freeze be imposed on the compensation being paid to nine tribal councilors and seven elders counselors.

According to the tribal constitution, salaries for tribal councilors start at $240,000 a year while entry-level salary for elders counselors is $70,000. However, without making the compensation public, some tribe members insist that salaries run much higher.

In fact, one tribal person reportedly received $3.6 million while a counselor between 1996 and 1998.

While councilors currently set their own pay, one dissident spokesperson said they should be accountable to the other members of the tribe just as leaders of major corporations are accountable to their shareholders.

THE INSIDER: A quarterly conference call to discuss the fiscal experience of the first quarter of 2004 has been scheduled by International Game Technology (IGT) for Thursday, Jan. 22, at 6 a.m. PDT.

Gaming analysts at Banc of America have increased their price target for the share price of Harrah’s Entertainment Inc. (HET) from $50 to $54. The company is expected to benefit from its rewards program, the analysts said.

Mississippi gaming officials will no longer require each casino employee to wear their gaming licenses containing their full names. An abbreviated name on a badge will suffice.

Friends and associates of Ralph Engelstad, the late owner of the Imperial Palace on the Las Vegas Strip, have formed a charitable corporation to own and operate the $100 million hockey arena at the University of North Dakota.

An Ohio bar owner has collected enough signatures to place a proposal on the March ballot that will ask the county voters whether off-track betting should be allowed.

Live racing was halted over the weekend at Mountaineer Racetrack when both sides failed to successfully negotiate a new contract with the Horsemen’s Benevolent and Protective Association. Negotiations are expected to resume this week.

Kentucky voters are expected to be asked whether they favor expansion of gambling in a referendum seeking a constitutional amendment.

After being closed for several months, a casino operated by the Meskwaki Indian tribe in Tama, Iowa, has reopened.

AmericaTab account wagering in Ohio is launching a new wireless wagering service. The company also plans to begin rebating to larger gamblers.