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Saturday, October 22, 2005
Racetrack claims contract breach
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Scarborough Downs has filed a $50 million lawsuit against Shawn Scott, the Las Vegas investor who helped to legalize slot machines at Maine's commercial harness racing tracks. The first slots parlor is scheduled to open near the Bangor Raceway next month, but Scarborough Downs was unable to find a host community for a racino in southern Maine. In the lawsuit filed in Cumberland County Superior Court last month, Davric Maine Corp., the owner of Scarborough Downs, claims Scott undermined its efforts by forming sham political action committees, filing frivolous lawsuits and otherwise spreading misleading information. "Defendants have made millions of dollars (in) this scheme, never having invested any meaningful resources into Maine harness racing and have intentionally caused plaintiff's business, Maine's largest commercial track, to suffer and be in financial peril," the lawsuit states. The lawsuit's allegations include breach of contract, wrongful use of civil proceedings, defamation, unjust enrichment and fraud. Scarborough Downs is seeking $50 million, claiming it would have made at least that much money if it had been able to operate its own racino, and unspecified punitive damages. Scott could not be reached for comment. Two attorneys who represented Scott in gambling-related matters in Maine - Bruce Merrill of Portland and Martin Gersten of Connecticut - could not be reached for comment. A statewide ballot measure approved by voters in November 2003 allowed the Bangor and Scarborough tracks to operate as many as 1,500 slot machines if voters in the host community gave their approval by the end of the year. The ballot question, drafted by Scott's company Capital Seven, stipulated that a so-called racino would have to be within five miles of an existing track. Bangor voters had indicated earlier in the year that they were open to the idea. Scarborough voters, however, rejected the notion, so Scarborough Downs looked for another host community. In December of 2003, voters in Westbrook and Saco rejected proposals that would have allowed Scarborough Downs to operate a racino in either community. While Scarborough Downs started looking for a new host community, Scott and his company that operated the track in Bangor began pursuing a state license for slot machines. One week later, Penn National Gaming assumed ownership of Scott's Bangor operating company in a $51 million deal - $50 million more than Scott paid to acquire the track's operating company. According to the lawsuit, public opinion in Westbrook favored slot machines before Scott and his company and political action committees interfered. Scott was not alone in his anti-racino efforts. The political action committee Casinos No! was campaigning against slot machines in Maine, and the Westbrook-based Our City, NO Slots! had dozens of members going door to door and passing out anti-slots literature. George Rodrigues, a steering committee member of Our City, NO Slots!, said it was hard to measure Scott's influence on the campaign "Shawn Scott didn't hurt us, but I suspect we would have won without him," he said. "There was a lot of passion on the ground." As part of the lawsuit, Scarborough Downs is asking the court to order Penn National Gaming to delay making a final payment of more than $30 million to Scott. Eric Schippers, a spokesman for Penn National, said the lawsuit would have no effect on the company's plan to open its slots parlor in Bangor on Nov. 4. Staff Writer Ann S. Kim can be contacted at 791-6383 or at:
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