Shawn Scott bought out of N.Y. racetrack

VERNON, N.Y. – Shawn Scott, a key figure in the controversy over racinos in Maine, will no longer be involved at the financially troubled Vernon Downs harness racing track.

Raceway Ventures LLC – a newly formed company based in Fort Lauderdale, Fla. – said Monday it purchased all outstanding capital stock in Mid-State Raceway from the family of Scott, a controversial Las Vegas investor once accused by former Vernon Downs officials of misusing funds.

Scott’s mother, Victoria, owned 50.2 percent of the capital stock in Mid-State, which operates Vernon Downs. Shawn Scott, meanwhile, owned warrants representing approximately 30 percent of the share capital in Mid-State.

While terms of the agreement were not available, Raceway Ventures spokesman Andrew Frank said the Scotts no longer have an interest in Mid-State.

Scott played a major role in Maine’s racino controversy. After purchasing Bangor Historic Track and winning voter approval for slot machines, he agreed to sell the harness track to Penn National Gaming.

His latest deal comes less than two weeks before the April 23 opening of Vernon Downs’ 52nd season.

Steven Cohen, a managing member of Raceway Ventures, has been appointed president of Mid-State, which also has filed a license with the state to operate Miracle Isle Gaming Resort at the track 35 miles east of Syracuse. The resort will feature video lottery terminals, which officials claim will generate $80 million a year.

Last year, Vernon Downs lost about $9 million, according to Gregory Schreffler, chief of audits and investigations for New York’s Racing and Wagering Board. Its total debt is pegged at around $23 million.

Patrick Danan, a Florida architect and developer, and Frank Leo, a New Jersey businessman, join Cohen in taking over the track’s controlling interest. Frank said the new owners plan to meet with state lottery officials soon to ensure there are no gaps in the application process.

“We believe Vernon Downs and the Miracle Isle Gaming Resort have tremendous potential,” said Cohen, who’s worked as a consultant at Pimlico Racecourse in Baltimore and at several European venues. “The track has a great history, and the resort and VLT facility give us an opportunity for continuing growth and expansion.”

Vernon Downs received its racing license March 22 after months of uncertainty.

The Racing and Wagering Board in December denied licenses to Shawn Scott and former track president Hoolae Paoa. The board also refused in February to renew the track’s operating license.

Scott, who stepped aside to appeal the state’s decision denying him a license, began to exert influence over Vernon Downs in 2002 when he lent the track about $8.5 million.

Through that loan and a series of others, he gained the rights to appoint the majority of the Mid-State board and buy up to 80 percent of the company’s stock.

Scott eventually was sued by investors, who claimed he cheated Vernon Downs of $7.5 million in questionable loan fees and fraudulently gained control of the track. A judge dismissed the suit in March, ruling there was no evidence to support the allegations.

Paoa, meanwhile, has a consultant agreement for 15 more days that will be honored, said Frank. Interim track president Dennis Dowd, appointed in late March, will remain in his position.