- The Washington Times - Saturday, August 7, 2004

CORRECTION: The article incorrectly reported that John K. Baldwin was denied a racing license in New York. Mr. Baldwin was not denied a license. The article also incorrectly reported that Shawn A. Scott was denied a racing license in Maine. Mr. Scott was denied a racing license in New York, not in Maine.

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The failed effort to put a $500 million gambling hall in Northeast was the latest setback for an offshore firm whose associates have been unsuccessfully pushing gambling ventures nationwide in the past year.

The D.C. Board of Elections and Ethics ruled Thursday that backers of an initiative supporting the proposed casino had legally collected only 14,587 of the 17,599 signatures needed to put the issue on the Nov. 2 ballot.

John Ray, a former D.C. Council member who is serving as the attorney for the Citizens Committee for the Video Lottery Terminal Initiative, yesterday filed a petition for review in the D.C. Court of Appeals, but it is considered unlikely that the court would overturn the board’s decision.

If the board’s decision stands, it would be the fifth gambling-related rejection in a year for associates of the St. Croix-based venture capital firm, Bridge Capital LLC.

Shawn A. Scott, the man who originally proposed the casino in the District, lost a bid in November to build a racetrack and casino in Hobbs, N.M.

Mr. Scott is the chief operating officer at Bridge Capital, which employs as its chief financial officer Robert L. Newell, the financier of the D.C. effort. Mr. Scott has a history of involvement in gambling ventures, often in partnership with Mr. Newell’s boss at Bridge Capital, John K. Baldwin and Mr. Newell’s brother, Michael Newell.

Mr. Scott’s New Mexico bid, one of four considered by the state, stood out among the competitors because it contained unique features such as a water park, an eight-screen movie theater, retail shops, a recreational vehicle park and basketball courts.

In the District, Mr. Newell’s plan called for movie theaters, a bowling alley and a children’s recreation center.

In Idaho in April, Mr. Scott and Mr. Baldwin’s brother, Brent Baldwin, withdrew an initiative proposal seeking voter approval for video lottery terminals to be installed at several racetracks in the state.

The initiative recommended the state’s proceeds be used to fund “senior citizens’ prescription and health care and to provide student scholarships.”

In the District, initiative supporters recommended that the city’s proceeds be used to “improve public schools and to help senior citizens obtain prescription drugs.”

The Idaho initiative, which would have placed the question on the November ballot, was withdrawn on April 30 — a day before petitions were due — because supporters failed to collect the necessary 41,000 signatures.

In Maine last November, Mr. Scott backed a successful petition drive that led to voter approval of video-lottery terminals at a racetrack he owned in Bangor.

Like in the District, the proposal also called for slots licensees to get 75 percent of the profits from the machines compared to 25 percent for the state.

The effort to put the initiative on the ballot included the professional signature-gathering firm Progressive Campaigns Inc., or PCI.

The same firm was hired by Mr. Newell to get the measure on the ballot in the District, where PCI hired a Florida-based subcontractor called Stars and Stripes for the petition drive.

That firm was charged with numerous violations of election law by the D.C. elections board.

The initiative passed in Maine, but in December Mr. Scott was denied a racing license necessary to operate the machines at a track after a state investigation indicated he owned or held ownership in dozens of other companies that exercised “sloppy, if not irresponsible” financial management, and that Mr. Baldwin exercised too much control over his finances.

New York gambling regulators also cited the intertwined finances between Mr. Baldwin and Mr. Scott in December when they denied Mr. Baldwin a racing license for a track in the town of Vernon.

Mr. Scott subsequently sold both racetracks.

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