NEWS
Legal questions surround some Hinsdale creditors
Posted: Thursday, December 18, 2008 5:39 PM
by Frank Angst
The bankruptcy filing by New Hampshire-based Hinsdale Greyhound Racing Association suggests its account wagering operation may have accepted players from restricted states.
Hinsdale owes 559 account holders more than $450,000 and many of the players—including two of the debtor’s largest creditors—list Nevada addresses. The Silver State does not permit its residents to place account wagers through out-of-state entities.
New Hampshire Pari-Mutuel Commission Director Paul Kelley said the bankruptcy filing illuminated the apparent problem. Currently New Hampshire keeps no records of individual account wagering players. Because it has no player list, the commission was not aware that many of Hinsdale’s biggest customers apparently are from Nevada.
Kelley anticipates the state could soon approve laws to require customer lists from state tracks that wish to offer account wagering. Customer lists would be required to attain a license.
“As a regulator, you’re often caught in the middle. You want to regulate without passing rules that put too much burden on a business,” Kelley said.
The largest bettor on the list of Hinsdale creditors is Herschel Bird at $138,150. Bird lists a Henderson, Nevada address. Creditor Byrne Kinney, of Las Vegas, is owed at $48,167.
It is not entirely clear if any of the players who list Nevada addresses broke any laws. Nevada law prohibits, “the placing, sending, transmitting, or relaying [of] wagers to another person,” through a medium of communication. Those mediums include telephone, cable, wire, and Internet, among others.
In February, Youbet.com closed its Oregon-licensed offshore rebate shop, International Racing Group, after legal issues involving Nevada customers, and federal officials seized $1.5-million from IRG in 2007.
Kelley said most state regulators require little in terms of customer information.
In other developments, John M. Sullivan, who is representing Hinsdale in its Chapter 7 bankruptcy, said the track’s account wagering operation expects to receive about $200,000 in winnings from 25 racetracks throughout the country, but that money will not necessarily go to the account players. A bankruptcy court will determine the beneficiaries of the $200,000 in payments and another $1-million from asset liquidation.
Of first priority will be payment of $332,158 in taxes. Non-priority claims, which includes all bettors with accounts of more than $10 and several racetracks, total $1,748,496 to put Hinsdale’s total debt at $2,080,654. In Chapter 7 bankruptcy, the debtor turns over all assets, which the court converts to cash and divides among creditors.
Hinsdale has made a motion to be excused of paying the 288 account holders owed $10 or less.
For a related story, click here.
Frank Angst is a senior staff writer of Thoroughbred Times
