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Woodbine is very concerned about integrity. From the NY report here are there partners in Empire Racing. You can see why the one dollar bet is such a big deal.

According to The Wall Street Journal (May 11, 2007), officials of Magna International, Inc., a Canadian auto parts maker, and Oleg Deripaska, a Russian aluminum magnate, announced a plan in which Mr. Deripaska would purchase a $1.54 billion stake in Magna. United States law enforcement officials suspect Mr. Deripaska of having ties to Russian organized crime. Deripaska’s visa to travel to the United States was canceled last year because of Washington’s legal concerns. The sale would give Deripaska significant control of Magna, giving him the right to nominate six of Magna’s fourteen Board members, the same number as are nominated by the Stronach family that currently controls Magna.

In the late 1990s, the Ontario Jockey Club provided a simulcast feed to World Gaming Services, Inc. (WGS), a rebate shop based in Anitgua, West Indies and a wholly owned subsidiary of Starnet Communications International, Inc. based in Vancouver, BC, Canada. Starnet began business in 1996 as a provider of Internet pornography and, in 1997, branched out into gaming and gaming technology. It obtained a gaming license from the Government of Anitgua and operated gaming websites through WGS. In April 1997, WGS obtained a simulcast feed from Woodbine Racetrack. In August 1999, the Royal Canadian Mounted Police, together with U.S. Customs and IRS agents, raided Starnet’s offices and the homes of its principals, pursuant to an investigation into illegal gambling and child pornography.

Additional discrepancies were also discovered with Empire. For example, one individual, Michael Dubb, has as many as 46 separate active lawsuits that he did not disclose but were later discovered during this integrity review. Dubb, also failed to disclose his racing or gaming licenses. While not included in his questionnaire, investigation revealed that he was issued a license by the New York State Racing and Wagering Board in February 2005. Moreover, his Racing Application History Report set out that a racing claim slip held by him was found to be invalid for the reason that “the signature [on the claim slip] was not Mr. Dubb’s.”

Scientific Games Holding Corp. did not reveal that a recent joint investigation by the FBI, the IRS and the North Carolina State Bureau of Investigation resulted in an October 2006 conviction of Scientific Games Vice President Alan Middleton for state lobbying law violations. Also convicted were North Carolina’s Speaker of the House, a former aide to the Speaker, and a member of the state’s Lottery Commission. Scientific Games also failed to disclose, as was later discovered by this integrity review, that it was involved in a federal litigation matter involving the company’s affiliates. In addition, approximately 100 state litigation matters involving affiliates of Scientific Games were discovered. None of these were disclosed by Scientific Games in its questionnaire.

Additional undisclosed domestic and foreign litigation matters pertaining to Scientific Games and its affiliates were revealed in the Key Person questionnaire of Ira Raphaelson,Vice President, Secretary, and General Counsel of Scientific Games since 2006. According to his questionnaire response, Mr. Raphaelson is a member of Empire’s Board of Managers (though he holds no ownership interest) and a member of its Integrity Task Force. In his questionnaire, however, Mr. Raphaelson omitted two items. Raphaelson failed to disclose that he had received a subpoena to testify in a 2003 federal
case in Nevada. When asked why he had not included this information in his
questionnaire response, Mr. Raphaelson stated that it had “slipped his mind.” He also did not disclose a recent civil lawsuit suit in which he was named as a defendant.

Records of the Superior Court of Ontario, from 2002 to the present,
revealed 55 civil suits in which Woodbine Entertainment Group was either a plaintiff or defendant. Scientific Games (or its affiliates) were involved in approximately 150 federal or state civil actions, as well as numerous regulatory matters for equipment or systems failures or other regulatory violations resulting in fines, costs and corrective actions. While civil litigation and regulatory infractions do not necessarily reflect on the integrity of Empire or its members, legal matters pertaining directly to gaming licenses and operation of casinos are identified below.


Magna Entertainment Corp. and/or its subsidiaries have been ordered to pay fines for various violations of law. For example, under an Order dated July 27, 2006, Magna and a number of its subsidiaries were required to pay a fine of $15,000 to the Nevada Gaming Commission. Gulfstream Park Racing Association, Inc., owned and operated by Magna, under a Consent Order dated March 9, 2007, agreed to a fine of $65,000 for underage gambling on the casino floor. Remington Park, Oklahoma, under a Consent Order dated October 19, 2006, and Remington Park, Inc., owned and operated by Magna,
agreed to pay a fine of $2,500 to the Oklahoma Horse Racing Commission for permitting an employee without a gaming occupation license into the gaming facility. Flamboro Downs Holding, Ltd., of Ontario, Canada, also owned and operated by Magna, was initially fined $100,000 (CDN) in 2004 for failure to comply with certain terms of its racing license.

On September 26, 2005, a judgment in the amount of $1,100,000 was entered against Richard Simon and Sez Who Thoroughbreds, Inc. in the 11th Judicial Circuit Court in Miami-Dade County, Florida. According to information provided by Empire, Richard Simon, through his Florida-based thoroughbred breeding and training company, Sez Who Thoroughbreds, Inc., currently owns .68 percent of the outstanding units issued by Empire. CIT Group/Equipment Financing, Inc. is the named creditor for this $1,100,000 judgment, the current status of which is unknown. Records of three federal tax liens between November 5, 2004 and May 23, 2005 in amounts ranging from $71,373 to $7,871,373 were also found.