May 12, 2003 – About a year ago, it seemed that horse racing on St. Thomas had gotten an injection of new life with a newly signed lease and franchise agreement for refurbishing the dilapidated Clinton E. Phipps Race Track.
The 20-year lease agreement entered into by the V.I. Horse Racing Commission and the St. Thomas-St. John Racing Commission with EQUUS-St. Thomas Racing and EQUUS-St. Thomas Racing Inc. (E-STRI) was ratified by the 24th Legislature last year.
Today the agreement is being disputed — E-STRI wants out.
EQUUS is a Virginia-based company which has interests in racing throughout the Caribbean and Central and South America, including a 99 percent interest in El Comandante Race Track in Puerto Rico.
Carl Charleswell, STRI president, said on Monday that the matter is in the hands of the corporation's attorney now, and because of that he didn't want to comment further.
Lester Ashby, past president of STRI, minced no words. He said he has local investors who would be happy to enter into an agreement with the corporation. Referring to EQUUS, he said on Monday: "We are disappointed with them. We had the franchise." He said EQUUS hasn't lived up to its part of the agreement and that no improvements have been made at the race track.
Ashby said EQUUS told him it was "unable to get financing after Sept. 11," referring to the mainland terrorist attacks in 2001.
At a Senate Finance Committee meeting last Tuesday, it was revealed that a 15 percent surcharge is being levied by the Pony Parlor in Frenchtown on each bet placed. Where that money goes, and whether gross receipts tax is paid on it was unclear.
The committee also learned that E-STRI owes the St. Thomas Horse Owners Association monthly payments for September, October and December of 2002 and April 2003. The agreement between E-STRI and the association states that the association is to pay "no later than the 10th of each month, a minimum monthly payment of $20,000 or 8 percent of money received from simulcasting, fees paid to simulcast providers, and 10 percent of the handling fees received from the races."
Since the hearing, which raised more questions than it answered, the committee chair, Sen. Adlah "Foncie" Donastorg has written to Attorney General Iver Stridiron and Louis Willis, Internal Revenue Bureau director, about the Pony Parlor's 15 percent surcharge.
Donastorg asked the IRB and the Attorney General's Office to investigate the legality of the charge and whether gross receipt tax is being paid on it. He asked Stridiron whether his office had issued a verbal opinion approving the fee and requested that his office "conduct a full-scale investigation of the various contracts and business arrangements now in effect at the race tracks."
Thomas Wilson, president of E-STRI, represents EQUUS. He was not at the hearing, and calls to his office were not returned on Monday.
In response to a letter written by Sen. Shawn-Michael Malone, a Finance Committee member, Wilson said the 15 per cent fee was "assessed using historical wagering amounts prior to us coming in." However, he did not supply the documentation justifying the fee that Malone had requested.
Gilbert Comissiong, who chairs the St. Thomas-St. John Horse Racing Commission, said on Monday that the commission's attorneys had looked into the legality of the 15 percent fee and "didn't find anything illegal with it."
However, Comissiong said, "we requested an investigation to see if money is owed to the government and used for the intended purpose." That purpose, he said, is building the St. Thomas race track and communications system.
Trevor R. James, chair of the St. Croix Racing Commission, submitted a letter to the Finance Committee detailing St. Croix's racing revenues. No such information was provided from St. Thomas. Comissiong told the committee that EQUUS pays its revenues directly to either the IRB or the Finance Department, and that the commission doesn't have access to the revenue figures.
James said slightly more than $285,000 was paid to the V.I. government from St. Croix horse racing operations between May 2002 and April 30, 2003. Half of the payments go into the General Fund and the other half to the Horse Racing Improvement Fund.
James said that Virgin Islands Racing Corp., which until recently held the lease franchise for St. Croix's Randall "Doc" James Race Track, reported its information in lump sum figures, so the three sources of income — parimutuel betting, offtrack betting and simulcasting — were not broken down. VIRCO terminated its lease-franchise agreement in March 2003, James said.
Efforts on Monday to learn the status of efforts to contract an entity to replace VIRCO were unsuccessful.
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