Thursday, Sept. 11, 2003 | 9:16 a.m.
DENVER -- The video lottery spin cycle moved into overdrive Wednesday following indictments against executives of the company pushing to allow the gaming machines at Colorado horse and dog tracks.
While supporters of a ballot proposal to authorize the machines rallied in Denver, shares of the company, Wembley, plummeted following news of the bribery indictments Tuesday in Rhode Island.
Those federal charges could jeopardize Wembley's ability to run live races in Colorado, let alone offer video lottery terminal (VLT) machines at its tracks.
But proponents of the proposed Amendment 33 to authorize VLTs at Wembley's four Colorado racetracks were unfazed, rallying Wednesday in City Park in support of the measure.
"It's about jobs. It's about the economy. It's about small businesses that depend on tourism for their livelihood," said Dave Costlow, owner of a rafting business in Fort Collins and a co-sponsor of Amendment 33.
The November ballot issue promises that if authorized, VLTs would raise at least $25 million annually for tourism promotion.
Costlow was among a gaggle of small business owners from across the state who attended the City Park rally. Many bemoaned the lack of perennial funding for tourism in Colorado and touted VLTs as the tax-free answer. The Rhode Island indictments accuse two of Wembley's top executives of conspiring to bribe Rhode Island legislators in a push for more VLTs at its Lincoln Park racetrack in Providence, R.I. Accused were the racetrack's CEO, Dan Bucci, and Wembley CEO Nigel Potter, who both resigned Tuesday vowing to fight the charges.
The company's Colorado-based Wembley USA, which owns four of Colorado's five racetracks, says the indictments do not implicate any operations in Colorado. However, as of Wednesday Potter was listed by the secretary of state's office as a director of Wembley's various Colorado holdings.
The company's stock fell 21.5 percent Wednesday, when word of the indictments broke on the London Stock Exchange. Wembley stock was active, with more than twice the average volume of shares changing hands.
When the company formally recognized the possibility of indictments in March, its stock fell almost 30 percent in a week and never has bounced back.
Lincoln Park, a racetrack casino with 1,700 VLTs, accounts for more than 90 percent of Wembley's profits.
"It is fundamental to what Wembley is and does," said a London-based analyst that watches Wembley and asked not be named. "Lincoln Park is a huge part of Wembley."
In an interview with The Denver Post last month in Rhode Island, Bucci bragged that he had sculpted the model racetrack casino. "We seem to have hit a formula that other states choose to emulate," he said.
If Bucci or Potter are convicted of the felony charges levied in the indictments, Wembley could lose its Colorado live racing license.
Wembley, which runs live greyhound and horse races at four Colorado tracks, in Colorado Springs, Pueblo, Commerce City and unincorporated Arapahoe County, is regulated by the Colorado Division of Racing, which is studying the indictments closely.
"We are looking at the details of this indictment and, if in fact they are found guilty, the division will launch an investigation into whether this was criminal activity by the entity or the individuals and what action should be taken," said racing division director Matt Cook.
The state's lottery division would oversee Wembley's VLT operations should Amendment 33 pass. Like the racing division, the lottery division would determine if any criminal activity was systemic throughout the company or simply the work of individuals.
archive
