Penn National sues Scott

Clarke Canfield

Monday, Dec. 22, 2003 | 9:17 a.m.

PORTLAND, Maine -- The company that has partnered with Scarborough Downs in hopes of operating a horse track with slot machines in Westbrook or Saco filed a federal lawsuit Friday against the Las Vegas gambling figure who wants to do the same in Bangor.

The suit filed by Penn National Gaming charges Shawn Scott, along with the political action committee Maine Opportunities and its treasurer, Kathleen Newman, with libel for buying a newspaper ad that Penn National says makes false accusations about it. The suit also charges the defendants with defamation and interference with business relations.

The suit revolves an ad taken out in the American Journal weekly newspaper this week that says Penn National had been charged in the 1990s with violating federal money-laundering laws.

Penn National says the case actually involved another gambling company -- not Penn National.

The two casinos involved in the case are owned by Pinnacle Entertainment Inc. and are in Mississippi, the lawsuit says. Penn National says it bought two other properties from Pinnacle in 2000, a year after Pinnacle had resolved the charges with the federal government.

The lawsuit is the latest twist in a series of attacks and counterattacks between Penn National and Scott and his company, Capital Seven.

Capital Seven has been sponsoring a media campaign to convince voters in Saco and Westbrook to defeat referendums on Dec. 30 on whether "racinos," industry jargon for horse tracks with slot machines, should be allowed in their cities.

"This latest assault in Shawn Scott's insidious campaign of deception and lies aimed at disrupting the democratic process in Westbrook and Saco simply cannot go unanswered," Jordan Savitch, general counsel of Penn National Gaming, said in a statement.

The suit seeks unspecified damages and asks that a retraction of equal size as the ad be published in a paper of mass circulation in southern Maine.

Christen Graham, a spokeswoman for Capital Seven, said Maine Opportunities has decided against running the ad again.

"We still stand behind the validity and accuracy of the ad, but as a matter of good faith we are ceasing publication of it," she said.

Newman could not be reached for comment. She declined comment earlier this week when asked about the ad.