In a universe of sixth-degree connectivity, all of us eventually can be tied to something sleazy. And so it is with Pennsylvania's embryonic gambling venture.
One of the groups that wants to run a casino in the state was, a few degrees and decades ago, linked to a bizarre car-bomb murder and convicted of racketeering. Another once had financial dealings with an Ohio mob boss. A third was alleged long ago to have ties to organized crime and once pleaded no contest in a conspiracy to defraud the government.
Old sins can cast long shadows, and the state regulators who award racing and casino licenses must confront them deftly. Their charge is to treat companies fairly while fending off the specter of organized crime, given the gambling industry's long history of mob affiliations.
So, would it be fair to deny a license to Delaware North, the company that wants to run the casino at Seven Springs Mountain Resort, for the mob associations of previous owners? Some were implicated but never charged in the 1976 car-bomb murder of Arizona journalist Don Bolles. Before dying of his injuries, Mr. Bolles implicated Emprise Co., the predecessor to Sportservice, which is now owned by Delaware North.
Should Louis DeNaples, the businessman who wants to turn an old Poconos lodge into a casino, be docked points because he pleaded no contest in 1978 to conspiracy charges in connection with a plan to defraud the U.S. government during the cleanup after Tropical Storm Agnes? And what about Mr. DeNaples' cameo appearance in a 1980s Pennsylvania Crime Commission report, which tenuously linked him to organized crime? Should Carmen Shick, who hopes to build a harness track and casino in Lawrence County, be punished for his late grandfather's courtroom tangle with convicted mob boss Lenine Strollo over a land deal in Puerto Rico? The state's Harness Racing Commission has already given the answer to that last one: Yes.
Lawrence County
In November 2005, the Harness Racing Commission rejected a proposal from Mr. Shick's Ambrosia Enterprises to build a mile-long racetrack -- and later a slots parlor.Commissioners said they were concerned about a 1999 lawsuit that Ambrosia filed against Mr. Strollo and another suspected Ohio mobster.
Mr. Shick claimed that Mr. Strollo had taken advantage of his grandfather when he was a sick old man and convinced him to finance the land deal. Mr. Strollo says he was a business partner of Mr. Schick's late grandfather, Carmen Ambrosia.
Mr. Shick wonders if the fate that befell his application for Lawrence County awaits the proposals for the Poconos and Seven Springs.
"Are the same standards going to apply, or is it going to be applied arbitrarily?" he asked.
Mr. Shick said he wouldn't comment further until his appeal of the Harness Racing Commission ruling is decided by the state Commonwealth Court, but his attorney, Victor B. Stabile, elaborated.
Part of what the harness commission and the Pennsylvania Gaming Control Board must decide, he said, is whether there is "clear and convincing evidence of the applicant's good character, honesty and integrity," among other impalpable criteria.
But does that mean applicants merely have to meet the letter of the 2004 gaming law by not having any felony convictions within the past 15 years? Or must they carry not even a taint of criminal association? In April, Mr. Stabile said, Commonwealth Court Judge Bonnie Brigance Leadbetter touched on that very issue, asking him whether the ancestral connection to a mobster had the "appearance of impropriety."
Mr. Stabile responded: "What is it you're looking to protect people from?" He suggested that it not should be just appearances, but actual threats to the viability and reputation of Pennsylvania's new gambling enterprise.
Seven Springs
Delaware North's history has scuttled some of its plans, too, fairly or not.
In 2003, the company wanted to finance a deal with Rosecroft Raceway in Maryland. But its would-be partner, Centaur Inc. of Indiana, backed out, citing Delaware North's 30-year-old organized crime conviction as a primary reason.
The association with Delaware North "could be fatal to our business," Centaur attorney Jackie Bennett, Jr., said in July 2003. In September of that year, the partnership was formally dissolved, over Delaware North's legal objections.
Centaur officials -- who now want to build a harness racing track and casino in Beaver County -- said they were concerned that a 1972 racketeering conviction involving Emprise Corp., a Delaware North predecessor, might have caused regulatory or licensing problems for the racetrack. Emprise had been convicted of conspiring to hide its ownership interest, and the interest of two mobsters, in the Frontier Casino in Las Vegas.
A few years later, in 1976, Mr. Bolles' last words after his car was bombed were: "They finally got me. The Mafia. Emprise." Mr. Bolles had been writing about Emprise, but three men with no ties to the company were later charged with his murder.
In its lawsuit against Centaur, Delaware North said Centaur backed out of the Maryland deal only because it was looking for better terms from other companies and not because of concerns about Delaware North's corporate history.
A previous deal had fallen through on similar grounds, however. In 1984, Delaware North withdrew a racing license application after the Vermont Racing Commission ruled that its past made it a poor candidate.
Delaware North points to the fact that it does business with the federal government, operating concessions at national parks and the U.S. Mint, as evidence that its criminal history is old news. Over the years, said the president of the company's gaming division, it has shed all employees and contracts that might have had links to organized crime.
"You're talking about things that happened at about the time man landed on the moon," said Ron Sultemeier. "It's been brought up by competitors. In a regulatory environment, it rarely comes up." He said the company has never had a racing or gaming license revoked.
The Poconos
One crime does not a criminal enterprise make, but if regulators choose to err on the side of caution, Mr. DeNaples' proposal could be in trouble.
Back in 1978, he pleaded no contest to the conspiracy charges related to the cleanup after Tropical Storm Agnes. But the defunct Pennsylvania Crime Commission, a state agency that investigated the criminal underworld, also linked Mr. DeNaples to organized crime a few years later. And in 2001, a federal affidavit made the same connection, claiming that Mr. DeNaples had contacts with the Buffalino crime family.
A spokesman for Mr. DeNaples, Kevin Feeley, said such statements about his client have no basis in fact but are difficult to counter.
"We get whacked, and you're defending against a ghost. People can make an issue of it, but ultimately it's up to the gaming board" to dig up the truth, he said.
The gaming board, and the army of investigators working for it, will do just that, said David Kwait, director of the board's bureau of investigation and enforcement. Without commenting on specific applications or infractions, he said old crimes, even those older than 15 years, "definitely will come into play" when proposals are being vetted.
"The totality of the circumstances of the background would be taken into consideration at that point," Mr. Kwait said. "The denial [of an application] could be based on those old convictions."
At the same time, "we have to think of due process issues. People have to be treated fairly," and red flags don't necessarily mean an application will be tossed, he said.
Mr. DeNaples and Mr. Shick are both in competitive situations. Mr. DeNaples is among six applicants for two stand-alone casino licenses. Mr. Shick would have to beat out Centaur's Beaver County proposal to win a single remaining harness racing license and the casino rights that probably would come with it. (At the moment, the Centaur proposal is stalled, as well, rejected by the harness commission for facility deficiencies.)
Delaware North's partnership with Seven Springs, however, is unopposed -- there are only two applicants for the two casino licenses being reserved for Pennsylvania resorts.
