Vegas investor awaits New York licensing probe

Friday, April 12, 2002 | 11:10 a.m.

SUN STAFF AND WIRE REPORTS

New York gaming regulators issued a 90-day license to a racetrack in central New York, but ordered a Las Vegas businessman to stay out of operations while a licensing investigation proceeded.

Shawn Scott, owner of the shuttered Vacation Village hotel-casino on the Las Vegas Strip's south end, is attempting to take a majority stake in Mid-State Raceway Inc., the parent company of Vernon Downs, a racetrack located east of Syracuse, N.Y. Scott's Capital One LLC now owns more than a third of Mid-State's stock, and recently loaned the racetrack $8.5 million. Funds were needed "to meet pressing financial obligations," the track said in March.

On Monday the New York Racing and Wagering Board issued a license to Vernon Downs that will allow the track to begin operations May 3. The license will expire July 6, and a decision on whether to issue a license for the remainder of the year will be made at that time. Scott will not be permitted to be involved in track operations before a licensing decision is made.

In the meantime New York gaming officials will conduct a licensing investigation into Scott. Michael Hoblock, chairman of the New York gaming board, said the temporary license would be immediately terminated if any "derogatory" information on Scott is uncovered. Tom Casaregola, head of the board's investigations division, cited "numerous potential regulatory issues in various gaming jurisdictions" as a concern, and had recommended keeping Scott out of operations until a licensing investigation was complete, the Syracuse Post-Standard reported.

Scott once held a Nevada gaming license as owner and operator of the Cheyenne casino in North Las Vegas, but relinquished it in 1997 after the Nevada Gaming Control Board criticized faulty accounting practices at the property. Scott and his partners sold the Cheyenne to West Virginia-based MTR Gaming Group in 1998, and the property is known today as the Speedway casino.

Scott hopes to take control of the struggling Vernon Downs and revitalize operations through the installment of 500 slot machines. Scott used a similar strategy in Louisiana, acquiring the Delta Downs racetrack in 1999 for $10 million. After winning approval to install machines at the track, Scott sold off the property last year for $125 million to Boyd Gaming Corp. Boyd opened the Delta Downs casino in February.

Scott could not be reached for comment.