Companies want to sever ties with tainted racetrack

Thursday, Feb. 5, 1998 | 10:18 a.m.

CARSON CITY -- The state Gaming Control Board was told Wednesday by representatives from two companies that they are severing ties with a Mexican horse and sports betting company allegedly run by a leader of a drug cartel.

Liza Miller Roche, attorney for American Wagering Inc. of Las Vegas, said the firm has no relationships with the gaming operation at Auga Caliente Racetrack in Tijuana. The racetrack is operated by Jorge Hank Rhon who is reportedly in the narcotics business in Mexico.

Frank Schreck, attorney for Autotote Corp. of Newark, Del., said the firm is in the process of divesting itself of business dealings with the Mexican operation.

American Wagering wants a license as a manufacturer and distributor and an operator's license for a slot machine it is buying from Autotote.

The board decided to delay action on the applications of both companies until they clear up financial dealings in their complicated business relationship.

The Caliente racetrack, which serves as a hub for sports and horse wagering at 40 cities in Mexico, has expanded to Panama, Columbia, Ecuador, Peru, Brazil and Uruguay.

American Wagering, headed by Vic Salerno of Las Vegas, purchased Computerized Bookmaking Systems Inc. from its parent, Autotote. Computerized Bookmaking developed a computer sports wagering system and, as part of the deal, Autotote kept the system that was sold to Caliente.

"We're going to extricate ourself from Caliente. But we want to be paid for the equipment," Schreck said.

American Wagering maintains that if the Caliente sports and horse race betting expands outside Mexico, Caliente must get licensing permission from American Wagering. But Caliente did not seek an OK from American Wagering as it moved into other Latin American countries.

Last year, IGT, the world's largest slot machine making company, had considered dealing with Caliente. But it told the gaming board that it withdrew because of the unsavory reputation of Rhon.

Under the financial arrangements of the deal between American Wagering and Autotote, Autotote would have to be licensed in Nevada. But Autotote has told gaming officials it's not ready to go through the licensing investigation and it wants to withdraw its application. Efforts have been made to restructure the deal so Autotote can bow out without Nevada licensing.

The applications will be considered at a later meeting, possibly a special meeting this month before the Feb. 26 meeting of the state Gaming Commission.

The board delayed until March the application of Stuart E. Apollo who wants to be licensed as a slot operator in Las Vegas. Apollo has several businesses with slot machines but he wants to expand his operation.

Board members, however, complained that Apollo hasn't fully explained how he got $40,000 to $50,000 to buy property in Las Vegas when he came from New York in 1993. Apollo said the money came from the sale of two taxicab medallions and an inheritance, but the board told him he needed to provide more documentation.