Harness racing panel hearings resume today

AUGUSTA – The Maine Harness Racing Commission hearings scheduled to start Monday were postponed for a day because of the winter storm that began late Sunday and raged through much of Monday.

The hearings will resume at 9 a.m. today at the Augusta Civic Center and are expected to run up to a week.

Henry Jackson, the commission’s executive director, said last week that intense public and media interest prompted the commission to move the hearings from one of the civic center’s meeting rooms to its main floor. Millions of dollars in gambling revenue are at stake.

The proceedings, which will cover licensing and commercial and fair race dates, are expected to draw an unusually large audience.

A harness racing license application from Bangor Historic Track, which operates Bangor Raceway, is among the matters the five-member state commission will address this week.

The city-owned raceway is the subject of a $30 million development deal between the city and Capital Seven LLC, owned by Hawaiian entrepreneur Shawn Scott. Capital Seven holds a controlling interest in Bangor Historic Track, which operated in 2003 with a conditional license pending the outcome of a state background investigation.

Scott plans to develop a racetrack casino, also known as a racino, at the city’s historic half-mile dirt oval. His contract with the city calls for an entertainment complex that will combine harness racing with year-round entertainment featuring up to 1,500 slot machines, among other things.

Scott already has mounted a successful statewide campaign in which voters granted approval on Nov. 4 for slots at Bangor Raceway and Scarborough Downs, Maine’s two commercial harness racing tracks. He also won local approval for slots at Bass Park in June. Renovations are under way at the Bangor track’s grandstand, which is being converted into a slots parlor that would accommodate the first 250 slot machines Capital Seven plans to install.

With a development agreement with the city in hand, it now appears that Scott’s only remaining hurdle – but a critical one – is a state harness racing license.

Despite what Scott has managed to accomplish so far, his company’s racing license, which also would give him the authority to install slots at the Bangor track, is by no means a shoo-in.

Although Bangor Historic Track’s status as the current licensee normally would give it a competitive edge, the findings of the state Attorney General’s Office uncovered past problems with litigation, licensing and liens in other states.

Also not working in Scott’s favor is the denial Friday of the licensing he needs in order to open the Miracle Isle, a slots facility proposed for Vernon Downs, a New York horse track he also controls.

Because of the uncertainty over Scott’s ability to obtain a Maine racing license, the city of Bangor also has applied for a license to help ensure that Bangor Raceway gets its race dates for 2004.

Kehl Management, an Iowa casino management company, also filed an application to run races at the Bangor track in the hopes of stepping in should Scott’s company be unable to fulfill its contractual obligations to the city of Bangor. Delaware North Companies, based in New York, also expressed interest in opening a racino in Bangor but did not apply for a state license. Representatives of Kehl and Delaware North both told Bangor city councilors they were open to operating a racino with the city as the license holder.

Scarborough Downs is the subject of a similar proposal and is working to that end with the Pennsylvania firm Penn National Gaming.

Under a provision of the Nov. 4 law, which is expected to undergo several revisions, racinos may be located within five miles of an existing commercial harness racing track.

Scott believes he has a verbal agreement with Scarborough Downs that predates its arrangement with Penn National and has initiated a legal challenge to that end.

He also has filed a civil lawsuit in Cumberland County Superior Court through a Westbrook couple in an attempt to invalidate the results of a Dec. 30 Westbrook referendum seeking local approval, as required by the racino legislation Mainers approved on Nov. 4.

Westbrook is one of two southern Maine communities to which Scarborough track officials turned after Scarborough residents rejected a zoning amendment that would have allowed slots at the track last month. The other is Saco.