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Best of Liz Benston

Gaming Guru

Liz Benston
 

Scott's Associates Promoting Racinos in Idaho

19 December 2003

IDAHO -- A group that emerged this month to promote slot machines at race tracks in Idaho has ties to Shawn Scott, a Las Vegas investor who has tangled with regulators in Nevada and New York.

The representative who presented the proposal to Idaho officials to legalize track slots, Debbie Bishop, is on the board of directors of Vernon Downs, a horse track in New York controlled by Scott and owned by parent company Mid-State Raceway Inc. Bishop, Scott and Scott associates have been named in a lawsuit filed by investors claiming that the associates financially drained the New York track through questionable loans made by Scott and his affiliates.

Idaho resident Brent Baldwin has identified himself in documents filed with the state as another representative of the racino slots measure and is the brother of John Baldwin, a Scott associate who is also named in the suit against the New York track.

Scott, Bishop and John Baldwin could not be reached for comment and Brent Baldwin declined comment.

The New York Racing and Wagering Board this month denied Scott a license, saying he made false statements on his application and wasn't fit to be involved in racing -- a decision Scott has said he will appeal.

The track faces a license renewal before it can operate next season. It also hopes to win a gaming license to operate slot machines at the site.

Scott also is facing a licensing hearing to operate slots at the Bangor Historic Raceway in Maine, which he also controls.

The Maine Department of Agriculture has prepared a damaging report on Scott and his business activities gleaned from regulators in several states including Nevada.

The information includes details of Scott's involvement in the former Cheyenne casino in North Las Vegas. In 1997, Scott withdrew his pending gaming license application to run the property. Regulators were prepared to deny Scott's gaming application, citing accounting problems. About $3 million of a $5.5 million loan granted for the purpose of renovating the casino ended up as loans to other companies controlled by Baldwin and Scott as well as loans made directly to Baldwin and Scott's "personal friends," the Maine investigation said.

Scott demonstrated a "lack of cooperation during investigations" conducted by the New York Racing and Wagering Board and the Louisiana State Police, the investigation said. Scott owns, holds or has held ownership interests in dozens of companies "which have demonstrated sloppy, if not irresponsible financial management and accounting practices over several years," it said.

Baldwin is listed as the registered agent for one of Scott's companies that shares the same address as more than a dozen companies also affiliated with Baldwin, according to the Nevada Secretary of State's Office.

The New York Legislature legalized slots at race tracks in 2001, while Maine voters passed a ballot measure in November to authorize slots.

According to the Mid-State lawsuit, filed in November in federal court, Scott began to exert control over the track through an $8.5 million loan in 2002. He began buying up the company's stock and appointing associates to the company's board of directors.

"Scott and his affiliates looted Mid-State, obtaining millions of dollars in exorbitant commitment and loan fees and excessive interest payments," the suit said.

The Idaho slot proposal calls for adding "video lottery terminals" at several tracks across the state and a 20 percent tax on machine profit that would go to fund college scholarships as well as local governments and other entities.

The initiative received 20 qualifying signatures and was sent this week to the Idaho Attorney General for review. The review is expected to take about 45 days. After it receives a ballot title and language is drafted, supporters will have until April 30 to collect the 40,772 signatures needed to qualify it for the November ballot.

Idaho already offers slot machines at Indian casinos, which won approval of an initiative last year that expressly legalized video lottery machines that have been in use for years. The state argued that the machines are banned by the state constitution.