Plainridge Racecourse's slots bid under scrutiny
August 2, 2013
(NECN: Peter Howe, Plainville/Newton, Mass.) - In the superheated five-way battle for the sole slots-parlor license authorized by Massachusetts’ casino law, Plainridge Racecourse in Plainville has been looking especially strong – to the point that the harness-track owners even went ahead and built a 1,500-space garage in expectation of winning the slots license.
But then, as first reported by The Boston Globe last week, Massachusetts Gaming Commission investigators discovered that former Plainridge co-owner Gary Piontkowski had been making highly unusual, almost daily cash withdrawals from the track’s cash room, reportedly without co-owners Stanley Fulton and Alfred Ross knowing for several years. That revelation apparently led to Piontkowski’s abrupt resignation from Plainridge Racecourse and the slots bid in April.
Massachusetts Gaming Commission chairman Stephen Crosby, interviewed Friday for NECN’s "This Week in Business" show airing Sunday, indicated the situation still raises a lot of questions.
"This was a guy who had been taking money from the money room for years, and his own ownership apparently didn't know it," Crosby said. "It wasn't until our background check that we found out. What that is indicative of is just the rigor and the thoroughness of this background check. We're finding stuff, finding out things that the companies themselves don't know about."
Crosby said the commission has 100 investigators checking the backgrounds of applicants and the $10 million process has generated more than 21,000 pages of documents so far.
Informed of Crosby’s comments, Plainridge spokesman Bill Ryan said, "We very much appreciate the opportunity to comment but politely decline to do so."
Plainridge is a five-way competition for the slots license with Penn National’s proposal in Tewksbury, Cordish Cos. in Leominster, Rush Street Gaming in Millbury, and Raynham Park.
No one has ever alleged that Piontkowski was outright stealing cash from Plainridge. What the Gaming Commission investigators found was that all the cash withdrawals – apparently exceeding $1 million in total over several years – were scrupulously accounted for in the racecourse’s ledgers, and at the end of each year declared as a distribution to Piontkowski.
But the big question for the gaming commission: Just because Piontkowski is gone, does that mean an organization that apparently tolerated highly unusual cash transfers can and should be entrusted with a license for a slots parlor that could suck in millions of dollars a week.
Boston College Carroll School of Management gambling expert Rev. Richard McGowan, who serves on the board of the state’s council on compulsive gambling, said just because Piontkowski’s gone doesn’t mean concerns about Plainridge’s organizational and managerial integrity are gone, too.
"I think there’s a lingering effect" from the revelation of the cash withdrawals, McGowan said. "It’s an industry that depends on trust. People have to trust the integrity of the operators. With all the people who want that slots license, why would you, as the regulator, take a chance?" (Plainridge’s Ryan said the track also did not want to respond to McGowan’s comments.)
On This Week in Business, NECN’s Mike Nikitas asked Crosby if Plainridge will be allowed to move ahead in the application process or disqualified because of concerns about the toleration of the cash withdrawals.
"Wait until Monday or Tuesday, and you’ll find out," was Crosby’s answer.
To date, the Gaming Commission has voted that Rush Street and Cordish are financially and morally qualified to move ahead with their bids. The commission hopes to vote on Plainridge and Raynham early this coming week, then Penn National in about three weeks, Crosby said.
After that, assuming all five are cleared by the Gaming Commission, there is a string of votes this month and next in each of those five communities on whether voters accept "host community agreements" negotiated with the slots parlor operators and want to have the facilities in their towns.
In his TWIB appearance – the show airs at 12:30 p.m. and 8 p.m. on NECN -- Crosby spoke at length about how rigorous the background checks have been. "It is more than vigorous. It is intrusive. It is very aggressive," Crosby said. As he learned about the details of what the law requires for background checks, Crosby said, "I responded as a businessman rather than as a public official when I saw these background checks initially I said, 'This is just obnoxious' -- talking about how many cars your kids own, your divorces, your personal scars and tattoos" so that the commission can ensure people who present themselves as the applicants can be physicially verified to be those people.
In response to a question about why it’s taken so long for casinos to move from talk to development in Massachusetts, Crosby noted that the commission itself has been up and running for 15 months and will be picking a slots parlor winner probably by December and eastern and western Massachusetts casino license winners around next April. But, Crosby added, "You ought to take a long time to decide whether to do casino gambling in Massachusetts. It is a very big, tough, complicated issue, which is still a fifty-fifty issue. There are significant potential negatives," Crosby said, "as well as significant potential positives."
With videographer John E. Stuart
But then, as first reported by The Boston Globe last week, Massachusetts Gaming Commission investigators discovered that former Plainridge co-owner Gary Piontkowski had been making highly unusual, almost daily cash withdrawals from the track’s cash room, reportedly without co-owners Stanley Fulton and Alfred Ross knowing for several years. That revelation apparently led to Piontkowski’s abrupt resignation from Plainridge Racecourse and the slots bid in April.
Massachusetts Gaming Commission chairman Stephen Crosby, interviewed Friday for NECN’s "This Week in Business" show airing Sunday, indicated the situation still raises a lot of questions.
"This was a guy who had been taking money from the money room for years, and his own ownership apparently didn't know it," Crosby said. "It wasn't until our background check that we found out. What that is indicative of is just the rigor and the thoroughness of this background check. We're finding stuff, finding out things that the companies themselves don't know about."
Crosby said the commission has 100 investigators checking the backgrounds of applicants and the $10 million process has generated more than 21,000 pages of documents so far.
Informed of Crosby’s comments, Plainridge spokesman Bill Ryan said, "We very much appreciate the opportunity to comment but politely decline to do so."
Plainridge is a five-way competition for the slots license with Penn National’s proposal in Tewksbury, Cordish Cos. in Leominster, Rush Street Gaming in Millbury, and Raynham Park.
No one has ever alleged that Piontkowski was outright stealing cash from Plainridge. What the Gaming Commission investigators found was that all the cash withdrawals – apparently exceeding $1 million in total over several years – were scrupulously accounted for in the racecourse’s ledgers, and at the end of each year declared as a distribution to Piontkowski.
But the big question for the gaming commission: Just because Piontkowski is gone, does that mean an organization that apparently tolerated highly unusual cash transfers can and should be entrusted with a license for a slots parlor that could suck in millions of dollars a week.
Boston College Carroll School of Management gambling expert Rev. Richard McGowan, who serves on the board of the state’s council on compulsive gambling, said just because Piontkowski’s gone doesn’t mean concerns about Plainridge’s organizational and managerial integrity are gone, too.
"I think there’s a lingering effect" from the revelation of the cash withdrawals, McGowan said. "It’s an industry that depends on trust. People have to trust the integrity of the operators. With all the people who want that slots license, why would you, as the regulator, take a chance?" (Plainridge’s Ryan said the track also did not want to respond to McGowan’s comments.)
On This Week in Business, NECN’s Mike Nikitas asked Crosby if Plainridge will be allowed to move ahead in the application process or disqualified because of concerns about the toleration of the cash withdrawals.
"Wait until Monday or Tuesday, and you’ll find out," was Crosby’s answer.
To date, the Gaming Commission has voted that Rush Street and Cordish are financially and morally qualified to move ahead with their bids. The commission hopes to vote on Plainridge and Raynham early this coming week, then Penn National in about three weeks, Crosby said.
After that, assuming all five are cleared by the Gaming Commission, there is a string of votes this month and next in each of those five communities on whether voters accept "host community agreements" negotiated with the slots parlor operators and want to have the facilities in their towns.
In his TWIB appearance – the show airs at 12:30 p.m. and 8 p.m. on NECN -- Crosby spoke at length about how rigorous the background checks have been. "It is more than vigorous. It is intrusive. It is very aggressive," Crosby said. As he learned about the details of what the law requires for background checks, Crosby said, "I responded as a businessman rather than as a public official when I saw these background checks initially I said, 'This is just obnoxious' -- talking about how many cars your kids own, your divorces, your personal scars and tattoos" so that the commission can ensure people who present themselves as the applicants can be physicially verified to be those people.
In response to a question about why it’s taken so long for casinos to move from talk to development in Massachusetts, Crosby noted that the commission itself has been up and running for 15 months and will be picking a slots parlor winner probably by December and eastern and western Massachusetts casino license winners around next April. But, Crosby added, "You ought to take a long time to decide whether to do casino gambling in Massachusetts. It is a very big, tough, complicated issue, which is still a fifty-fifty issue. There are significant potential negatives," Crosby said, "as well as significant potential positives."
With videographer John E. Stuart
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