Racetrack Licensing on Hold in New Mexico

by Hector San Miguel

The New Mexico Racing Commission will take no action on licensing a racetrack in Hobbs until early next year. The delay comes after Gov. Gary Johnson removed three members of the five-member commission in November.

Commission chairman Greg Drake and commissioner Russ Moore were ousted, while commissioner Michael Harbour resigned. The two remaining members are Susan Vescovo and Harley "Beaver" Segotta. Three members are needed for a quorum.

"Basically, we don't have a quorum or commission at this point in time," said Julian Luna, the commission's executive director. "So, we are basically waiting for the new governor, Bill Richardson, to come in January and appoint a quorum. There were actually three members removed by Gov. Johnson, so at this point in time, we are just waiting for the new governor to come in and appoint some new commissioners, and see where we go from there."

Johnson appointed his special counsel, Robert Stranahan, to the racing commission for one day to let the panel have a quorum and hold a hearing Dec. 16 on an appeal involving a disqualified racehorse.

The commission staff is now in the process of drafting a written order stating why it rejected in October one of three track applications submitted for Hobbs. The application was submitted by former Delta Downs owner Shawn Scott, who proposed building a $30-million track and casino called Lea Downs. Scott has indicated he will most likely challenge the ruling.

Johnson took action against the commission because he wanted the panel to delay action on the Hobbs track until questions could be answered about the impact the track could have on the state's gambling compacts with Indian tribes. David McCumber, Johnson's chief of staff, also recommended action against the commission because it would not delay voting on an application for Hobbs submitted by R.D. Hubbard, owner of Ruidoso Downs.

McCumber wanted a delay because the New Mexico Gaming Control Board's staff had recommended against renewing Hubbard's gaming license for the track. The recommendation centered on actions by the Indiana Gaming Control Board against Hubbard for his role in a scandal involving prostitutes brought in for a golf tournament last year at the Belterra casino resort in Indiana.

The casino is owned by Pinnacle Entertainment. The scandal led to the resignations of Hubbard as the company's chairman of the board and Paul Alanis as company chief executive officer.

Hubbard was fined $740,000 and ordered to pay $10,000 in costs for the board's investigation. He also lost his gaming license and was ordered to divest himself from Pinnacle.

The New Mexico Gaming Control Board voted to renew Hubbard's license for one year, but it's now considering action against Hubbard for not telling the board about his problems in Indiana.

Johnson's action came Nov. 18, the same day the racing commission was going to take action on Hubbard's license request for a racetrack in Hobbs. Hubbard proposed building Zia Park, a $27.5-million track and slots casino.

In April 2000, two racing commissions testified before the Senate Corporations and Transportation Committee that Johnson had not interfered in decisions of the racing commission, including the Hobbs issue. Billy Blackburn, then-chairman of the commission, told the committee Johnson had never told him how to vote on any matter.

Commissioner Peggy Beaudette also testified that Johnson had never tried to influence decisions on licensing or regulating tracks.

Senate President Pro Tem Manny Aragon asked the commissioners to testify at the committee meeting. He said then he wanted to know if Johnson was trying to block the licensing of any additional racetracks.

Johnson said in 1999 he was opposed to the number of slot machines at racetracks, licensing of any new racetracks, and Indian casinos off the reservation.