New Mexico Racing Commission grills track officials; postpones licensing decision

Pete Herrera

Thursday, Feb. 24, 2000 | 9:58 a.m.

ALBUQUERQUE - The future of SunRay Park remained on hold Wednesday when the state Racing Commission again postponed a decision on whether to approve a racing license for the financially-troubled Farmington horse track.

Despite assurances from investors and a new management team that the track will be able to pay its bills and attract more gamblers, the commission decided to hold off on granting the track racing dates for next fall.

If the commission doesn't approve racing dates for a live meet, SunRay Park and its casino would have to shut down. Under state law, a racetrack in New Mexico must have a minimum of 17 days of live racing to simulcast horse races from other tracks.

It's the second time in the last month the commission has held off on SunRay Park's racing dates. The commissioners voted Wednesday to wait until their March 22 meeting to reconsider the license.

SunRay Park would have a 41-day race meet starting in October if its license is renewed.

SunRay Park and Casino's financial troubles and its dealings with the commission are at the heart of the commission's reluctance.

Commissioners were told last month the track owed 28 creditors an estimated $2.9 million. On Wednesday, commissioners learned the track's debt as of Jan. 31 was $3.7 million and the actual number of creditors was 258.

For more than 3half hours, commissioners grilled track officials and investors over how the state's newest track - it opened in July 1999 - got into so much trouble.

Investors and track officials took turns blaming Ray Walters, the former president of SunRay Gaming Inc., the corporation that runs the track and casino. Walters resigned earlier this month and didn't attend Wednesday's meeting.

Walters could not be reached for comment. Several calls placed to his residence in southern Colorado resulted in a busy signal.

Because SunRay underestimated expenses and overestimated revenues during its first year of operation, investors have had to pump in an additional $2.6 million. Since June 1999, there have been three calls for cash from investors. The latest call, for $1.1 million, was issued Tuesday, said Byron Campbell, the track's general manager.

The investors - some of whom are part of the new management - said Walters made all of the financial decisions and didn't inform them of the track's finances. Investors said when they asked Walters for an accounting, he repeatedly put them off.

"You guys had more information on our business than we did," investor Ken Kendrick told the commission.

"We were given the impression that the accounts payable and the operating expenses could be taken care of through the cash calls," investor Greg Hamilton said.

Commissioners were not satisfied with the SunRay's answers, adding that the track has repeatedly given them misleading or erroneous information.

"Every figure that's been presented to the commission has been incorrect," Commissioner Greg Drake told track officials. "You've lost a lot of trust with us. Until this meeting, you've walked around a lot of answers."

Commission Chairman Billy Blackburn asked Campbell and Ken Stone, SunRay's media relations director, if they had ever been told to lie to the commission. Both said they hadn't.

Stone later said, however, he had been instructed by Walters to issue a press release that refuted the $2.9 million debt figure announced in January. The release said the track's debt was closer to $800,000.

Blackburn asked the track's chief financial officer, Philip Frazer, why he was not aware of the financial problems. Frazer said he joined SunRay in October, and his focus was on getting the corporation's accounting system straightened out. He said Walters remained in control of the finances.

"We knew there was a lot of money owed, we just didn't know how much," Campbell said.

John Turner, an investor from Shreveport, La., who put up more than $300,000 in the latest cash call, said investors don't know if they'll have to come up with more money, but they believe there's enough money now to pay off most of the debt.

"We think we're almost to the bottom of the barrel," he said.

Investors asked the commission for another chance to prove SunRay Park can succeed.

"None of us can come up with any idea or excuse for where the books are, but we are determined - if you give us a chance - to make sure it doesn't happen again," Turner said.