A husband and wife that have been banned from Hollywood Casino at Charles Town Races for more than eight years in connection with a horseman's group civil lawsuit finally had their appeal heard Jan. 29.
The case served as the primary impetus for a major court ruling regarding exclusions in West Virginia.
Dick and Janene Watson were excluded by track management in September 2005 on the basis of "integrity" issues regarding the finances of the Charles Town Horsemen's Benevolent and Protective Association, but never lost their West Virginia racing licenses. Dick Watson, now 80, and Janene Watson, 77, had served as president and executive director, respectively, of the Charles Town HBPA.
The late January hearing in Charles Town was the result of a November 2011 ruling by the West Virginia Supreme Court of Appeals that said permit holders have the right to appeal ejections from racetracks to the West Virginia Racing Commission. The regulatory agency adopted new procedural rules in February 2012, and has been hearing ejection appeals on a regular basis since then.
The WVRC pursued court relief after lawsuits by Charles Town owner Penn National Gaming Inc. to keep it from hearing the appeals. The legal back-and-forth, which also involved the National HBPA, went on for roughly five years and continues today.
About three hours of testimony before hearing examiner Jeff Blaydes Jan. 29 centered on details of a civil suit filed by the Charles Town HBPA against Dick Watson in 2004 alleging unauthorized loans and purchases while he was president of the organization. The suit, filed in Jefferson County Circuit Court in West Virginia, contained a laundry list of allegations.
The case was settled privately for $3,000. Dick Watson, who repeatedly said there were no violations of Charles Town HBPA bylaws, wasn't charged with a crime.
Watson and his wife have since been welcomed back to the Charles Town HBPA as honorary members. They can't be actual members until they run a horse at Charles Town, something they've been unable to do since 2005.
"This is a disproportionate length of time for the Watsons not being able to utilize the license given to them," their attorney, David Hammer, said during the Jan. 29 hearing in Charles Town. "We're here to say, 'Enough is enough.' "
Said Brian Peterson, an attorney who represents PNGI: "(The company) has a strong public interest in the integrity of racing. PNGI has a public duty to retain the integrity of the sport, including (taking action against) people who engage in corrupt practices."
Loans and cash advances
Peterson, in questioning Dick Watson, referred to the settlement agreement between Watson and the Charles Town HBPA, as well as an audit that had been performed during the HBPA investigation into use of funds. The documents apparently were sent to Charles Town officials by Wayne Harrison, who was Charles Town HBPA president when Watson and his wife were suspended.
Petersen asked Dick Watson about a $50,000 loan he made to his son to start a business; purchase of a John Deere vehicle for $6,000 and a camera for $1,000; and various loans and credit card charges ranging from $2,500 to $12,000.
Watson said the loan to his son was paid back in about a year, and the vehicle, used for transporting people around the backstretch, was kept at his farm for a period of time because there was nowhere safe to store it on racetrack property.  He admitted some of the cash advances were used for gambling while on trips, but charges and loans were paid back in days, weeks, or months, he said.
Watson said it was common practice for the HBPA board to approve expenditures after the fact on a monthly basis during its meetings. He said many of them were approved, but he acknowledged he should have handled things differently.
"I should have used a better way to use the credit card," Watson said. "I should have been more specific about how the finances were handled. Let's not have any mistake that I have admitted I did things I shouldn't have done. Was there a better way to do them? In many cases, there was no strict way to do it."
Hammer asked Watson if there was a "power struggle" on the Charles Town HBPA board, to which he responded: "Yes." No further questions were asked on that subject, but the tumultuous period has been documented in the press.
Late in 2003, Watson lost the HBPA presidency to Ann Hilton in a heated election he believes was used to discredit him. Only a few months into 2004, Hilton took a leave of absence, reportedly due to health reasons, and then stepped down. She was replaced by Harrison.
Harrison and vice president David Walters then resigned from the Charles Town HBPA board Jan. 1, 2006, reportedly for personal reasons.
Watson, after signing his letter of apology to the HBPA board in the summer of 2004, claimed the organization employed a campaign of "lies, half-truths, innuendos, and character assassinations" that began in 2003 and carried through the election. Still a member of the HBPA at the time, he called for a special election for president between himself and Harrison, claiming rank-and-file members supported him. Soon after, the expulsion order was issued by the HBPA board.
Watson, who served in the U.S. Army for 31 years and was discharged as a full colonel, was known for his strong opinions and take-charge attitude during his tenure as president of the Charles Town HBPA. He said in the past he believed he had a fairly good working relationship with PNGI officials despite the usual contract disputes many horseman's groups and racetracks face.
There were, however, accusations PNGI had targeted Watson. Hammer submitted as evidence a copy of a Charles Town company newsletter with a front-page article claiming to tell "the truth" about Dick Watson. The settlement agreement, supposedly private, was reproduced in the article. Hammer noted some horsemen received the newsletter and questioned whether PNGI had attempted to publicly embarrass Watson.
Basis for the ejection
No PNGI officials directly involved in the Watson exclusion case appeared at the Jan. 29 hearing. The witness was Charles Town vice president of racing Erich Zimny, who wasn't on staff at the time but in recent years has been part of a management committee that has rejected requests by the Watsons to be reinstated.
Under questioning from Peterson and Hammer, Zimny said integrity is of the utmost importance to racing and the gambling business.
"It's difficult to let someone back in who has misappropriated funds," Zimny said. "(The HBPA) is an organization we do business with very closely. They say they like to be partners with us. It's incredibly hard to look past this in a business where money frequently changes hands.
"To me this is a very cut-and-dry issue."
When asked by Hammer if Charles Town, through its newsletter, attempted to humiliate the Watsons, Zimny said: "Not that I've seen. I'm not aware of anything. I'm not aware of any attempt to humiliate them."
Hammer in his questioning noted the Watsons did nothing wrong in regard to business on the racetrack. They had no suspensions or fines, and the Charles Town HBPA handled the financial issues internally through a suspension and civil suit.
"When is enough enough? I can't answer that question," Zimny said. "I can't point to any event that would allow them back in. Eight years is not enough. For me, it's not eight years, and probably not 10 years. I don't know if it's 15 or 20 years."
It was noted during the hearing that the WVRC said it "was given to understand" the Watsons would be allowed back on the grounds at Charles Town when their HBPA membership suspension expired. They were officially eligible to rejoin Jan. 1, 2007.
Some horsemen with knowledge of the case privately questioned the length of the ban. They noted convicted felons are allowed back on the racetrack, as are those whose actionsgetting equine drug positives, for instancedirectly impact the integrity of racing and wagering.
More to the story?
Adversarial relations between the Charles Town HBPA and PNGI aren't uncommon. For instance, former and current HBPA president Randy Funkhouser has been at odds with the company since the first referendum to authorize video lottery terminals at Charles Town in the mid-1990s failed to pass in Jefferson County.
Charles Town received local approval in 2009 to add table games two years after the initial referendum was shot down by voters. In 2009 Janene Watson was accused by management of opposing table games, a charge she denied during the Jan. 29 hearing.
She acknowledged participating in local forums on the subject but said her beef was with language that would put the horsemen's cut from table games into one pot that would be split equally between Charles Town and Mountaineer Casino, Racetrack & Resort. With more revenue generated at Charles Town, local horsemen would lose money, she said.
The measure passed as originally written but was quickly changed in the next legislative session to allow each track to keep their share of revenue generated by table games.
Before their exclusion in 2005 the Watsons owned a small farm near Charles Town with about 25 horses. They sold the farm "to pay lawyers and buy hay," but still have a few broodmares and older but sound horses that could race, Janene Watson said.
The couple participated in the West Virginia breeding program and won several state-bred stakes at Charles Town. Janene Watson said they hope to race horses at Charles Town again; as licensed permit holders in West Virginia the Watsons could have raced at Mountaineer but said they have no desire to move to the other side of the state or ship horses five hours to race.
"I still want to be in the horse business," Janene Watson said. "I would like to be able to earn enough money to come up with a couple of racehorses."
She also said Hollywood Casino at Penn National Race Course, owned by PNGI, would have accepted their entries if they had Pennsylvania racing licenses.
Blaydes will submit his recommendation on the Watson case to the WVRC, which could act on his recommendation sometime in the spring.
Meanwhile, the litigation continues regarding the WVRC's right to hold hearings for excluded permit holders.
Much of the early work in the case was handled by former National HBPA lawyer Doug McSwain. In recent years, senior deputy attorney general Kelli Talbott has handed the case on behalf of the WVRC.
PNGI believes it has the right to eject persons from its properties. It has appealed to the West Virginia Supreme Court of Appeals a 2013 circuit court ruling that upheld the WVRC's right to promulgate rules to cover ejection hearings. The company's appeal was accepted and scheduled two days after the Watson hearing.
PNGI argues, among other things, that the WVRC rule on hearing exclusion appeals requires legislative approval. Without it, it contends that the commission doesn't have the authority to stay the ejections of permit holders. Briefs in the case are due May 1 and May 21, according to court documents.

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