Revenue, jobs at stake following R.I. indictment

Michael Mello

Thursday, Sept. 11, 2003 | 9:15 a.m.

PROVIDENCE, R.I. -- The stakes are high for Lincoln Park, its parent company and the state in a federal indictment of the companies' top executives on charges they were involved in a bribery scheme.

The park employs about 800 and is the largest gambling enterprise in the state, with a dog track and 2,200 video lottery terminals. Last year it generated $127 million for the state and is the top revenue source for its parent, London-based Wembley.

Daniel Bucci, the park's chief executive, and Nigel Potter, Wembley's chief executive, on Wednesday temporarily stepped down. They are charged in what prosecutors say was a scheme to add more slot machines at the park.

Gov. Don Carcieri spent the day meeting with state regulators and officials to determine what steps the state might take in response to Tuesday's indictment.

He said that, if true, the charges "bolster my grave concerns about the consequences of gambling."

But he also said it's critical that the park continue to operate, citing both the jobs and the tens of millions of dollars the state annually collects from park operations.

"A lot of jobs are at stake here and an important source of revenue to the state," he said.

Carcieri, a Republican, said he was assured "we currently have no reason to believe that the integrity of Lincoln Park's gaming operations has been compromised."

The governor said he is meeting next week with a top official from Wembley to talk about his concerns and whether the company still plans to add 800 new machines. Lincoln Park said earlier this year the expansion might be delayed because the state increased its share of the profits from the slots.

Senate President William Irons, D-East Providence, said he hopes the expansion goes forward because the state is counting on the millions of dollars in additional revenue.

"There's no doubt in my mind we need the new machines," Irons said.

The indictment claims the defendants wanted to influence the state Lottery Commission to approve additional video lottery terminals at the park.

Prosecutors say the scheme involved a proposed $4.5 million payment over six years to a Pawtucket law firm in which Rep. John Harwood, who was House speaker at the time, is a partner.

The nine-member Lottery Commission, which includes six state lawmakers, in January unanimously approved nearly doubling the total number of video lottery terminals at Lincoln Park and Newport Grand Jai Alai. Lincoln Park won approval to add 1,300 new machines.

Both Irons and Lottery Commission Chairwoman Sen. Maryellen Goodwin, D-Providence, denied any knowledge of attempts to influence the panel's vote.

"If they did attempt to do that ... I would be outraged and insulted," she said.

Lincoln Park is regulated by the Lottery Commission and the Department of Business Regulation. Officials with both offices said it's premature to take any action against the park.

Commission legal counsel Robert Silva says the panel can suspend or revoke the park's license to operate the video slots, but only if there is a violation of the law.

Wembley also has much to lose.

The company makes about 90 percent of its profits from its operations in Rhode Island and Colorado, where a subsidiary owns four race tracks.

Wembley USA is backing a plan to add video machines at Colorado's five tracks.

Colorado voters will decide Nov. 4 whether to allow video gambling at the race tracks. Wembley USA has spent at least $10 million promoting the initiative.

Andrew Burnett, a Merrill Lynch analyst in London, said in a report to investors that Wembley "faces the prospect of a court trial ... that could take months, if not years."

He said that if the company's license to operate video slots at Lincoln Park is revoked, "it would wipe out most of the value in the share price currently."

On the Stock Exchange in London, Wembley closed down 21.5 percent at 525 pence, or $8.40.