Friends of Prop B-their track record :-(

Vernon Downs granted license for rest of season

CNY Business Journal (1996+),  Jul 05, 2002  by Dickinson, Casey J

VERNON - Vernon Downs will finish its 50th racing season. The track has received temporary state racing and simulcasting licenses for the remainder of the season. The racetrack received 90-day temporary licenses in April after the New York State Racing and Wagering Board raised questions about the track's finances and future. The state banned the Mid-State Raceway's management from associating with investor Shawn Scott until he obtained a state racing license. Two of his companies, Vernon, LLC and All Capital LLC, have loaned Mid-State nearly $9 million.

Scott and seven of his business associates have been re-issued "valid" license receipts, allowing them to participate in track management, says Stacy Clifford, spokeswoman for the Racing and Wagering Board. The eight will have to undergo further review before receiving final license approval.

In 1999, Scott bought an ailing Louisiana racetrack, Delta Downs, for $10 million. By May 2001, after winning approval to add slot machines to Delta Downs, Scott sold the track for $130 million. Vernon Downs is scheduled to install 500 video lottery terminals under a state gambling expansion approved last year

Though the state lifted its restrictions on Scott, it placed new conditions on the track's license for the rest of the season. The state is requiring John Baldwin, a business associate of Scott's, to obtain a state racing license because of his financial proximity to Scott's funds.

"Of primary concern is the fact that [Shawn Scott's] finances are integrated with those of a Mr. John Baldwin," said Edward Martin, executive director of the Racing and Wagering Board in a statement prepared for the board.

As an example, Martin cites a $10-million wire transfer from Capital One LLC to Baldwin. The statement said Scott "could only speculate as to the reason for this payment."

Because the track is projected to lose $1.7 million this year, the board also required Mid-State to open an escrow account for the payment of purse money.

Mid-State Raceway has terminated the purchase option granted to three other investors - Sanford Goldfarb, Eric Cherry, and Steven Goldberg - according to a report filed with the Securities and Exchange Commission. The filing states that the investors missed deadlines for making a deal. The investor group has countered with a lawsuit against, Mid-State filed in state Supreme Courtin New York City.

Copyright Central New York Business Journal Jul 05, 2002