Pompano track owner took longshot on slot machines being approved - Saturday 12th of March 2005
He's a gambler, just not on the horses that run his track. Or on the slot machines that fill his riverboat casinos.
He's a gambler, and 10 years ago, his company gambled that Broward County voters would someday approve slot machines at racetracks.
br>Finally, it's payday.
Bernard Goldstein, part-time Boca Raton resident and chief executive officer of Isle of Capri Casinos, has kept a low profile since the Biloxi-based company bought Pompano Park Harness Track. That is about to change, as he embarks on a $100 million plan to turn the aging racetrack into an entertainment destination.
br>While he is largely unknown locally, Goldstein is famous -- infamous, to some -- in gambling circles. He's been dubbed the `Father of Riverboat Gambling' and called an economic savior in parts of Mississippi. Yet his company has been accused of dealing with the mob, lying on casino applications, and being dangerously in debt.
Goldstein denies these charges and says his company has always been honest-yet-aggressive in its pursuit of casino properties. He thinks Pompano Park has great potential.
"This is big potatoes. This could be our biggest property yet," said Goldstein, who grew up in Illinois and made his fortune in scrap metal and barges on the Mississippi River. His family now owns about 40 percent of the stock in Isle of Capri, which runs 16 casinos.
Come New Year's, Isle of Capri hopes to add a 150,000 square-foot "racino" building at Pompano Park that would house 1,800 slots. After that, there is talk of a hotel, spa and a Tri-Rail stop, all in hopes of bringing in more than $200 million a year.
How much of that goes to taxes and how much will line Isle of Capri's wallet depends on taxes and regulations the state Legislature has yet to approve and the success of Isle of Capri's lobbying efforts. Since 2000, the company and its interests have contributed about $5 million to a pro-slots campaign group and sunk $1.15 million into the most recent election.
Despite some analyst worries that Isle of Capri is carrying too much debt, Goldstein, 76, insists that debt and risk are necessary for growth, and that his company has plenty of cash and equity to get loans for "Phase I" of the Pompano Park project.
"Sure, it's a gamble every time you start a new business," he "But it's fun creating things. It's fun producing something that helps the community, the economy. At this stage, it's a matter of experience and instinct. And my instinct says this is going to be easy. There is such a hunger here for more entertainment."
Local commissioners are generally optimistic about the plan to transform Pompano Park, which still needs city approval. Most admit they aren't sure what to expect from Isle of Capri.
"They haven't really made themselves felt in any which way," aid Pompano Beach Commissioner George Brummer, a Palm Aire resident and neighbor to the 223-acre track.
Those who have dealt with Goldstein in other states have stronger opinions.
Robert Miller, who co-held a gambling license with Goldstein in Iowa and is now an anti-gambling advocate, warns: "They'll make a lot of promises and if you don't get it in writing and have consequences, you'll never see it. The roads, the streets and infrastructure, make sure they pay for everything. The public shouldn't pay a penny."
Miller is one of many Iowa residents who labeled Goldstein a traitor back in 1992. Shortly after the state passed laws allowing riverboat gambling with restrictions, Goldstein came out of his Florida retirement and began operating two boats there. "I got tired of walking along the beach picking up shells," said Goldstein.
The first riverboat profits and Goldstein's celebrity were short-lived, however.
eighboring states soon passed laws that allowed gambling, only without Iowa's limits. Goldstein and his company began losing millions to the competition. After just a year in Iowa, he moved is boats to Biloxi rather than declare bankruptcy.
The move jilted Iowa, particularly the city of Fort Madison, hich had borrowed $2.6 million to spruce up its riverfront and then had nothing to dock there.
"It was anger and disillusionment and disappointment," recalled ardie Smith, director of the Fort Madison Area Convention & Visitors Bureau.
The city sued, but lost -- thus Miller's advice about getting everything in writing.
Chevis Swetman, president of the Peoples Bank of Biloxi Mississippi, counters that South Florida is lucky to have a piece of Goldstein and Isle of Capri.
"I got to know [Goldstein] before they got big, and he had a ision. He's dedicated, he's a hard worker and he surrounds himself with good people," Swetman said. "They are not a good corporate citizen, they are a model corporate citizen."
Model citizen or not, Isle of Capri and Goldstein have had their share of troubles.
Before settling on Biloxi, Goldstein tried to move some of his business to Illinois. According to records with the Illinois Gaming Commission, Goldstein and his wife were leasing and selling gaming equipment without a license and at inflated prices. They were fined $255,000 and, according to then-administrator of gaming Mort Friedman, banned from running gambling operations in the state as part of the settlement.
Goldstein insists his company was given permission to sell the equipment by one hand of the government, and then told it couldn't by the other. He said he paid the fine for business reasons and left the state on his own, in disgust.
In 2000, the U.S. Treasury Department slapped the company with a $377,500 fine for 75 violations of an anti-money laundering reporting requirement.
In 2001, the Missouri Gaming Commission handed down a $250,000 fine for filing false information on a casino application after the company said it had necessary permits and property that it didn't, records show. The investigation blamed the mistake on "sloppy" management.
Last year, members of the Illinois Gaming Board voted to award Isle of Capri a license to operate a casino near Chicago's O'Hare Airport. The next week, Illinois Attorney General Lisa Madigan wrote a scathing letter accusing the board of favoritism and the deal of having mob ties. She also questioned why Goldstein, supposedly banned from doing business in the state, was allowed to return.
The board responded that it voted for Isle of Capri based partly on the proposed location of the casino, which members liked. Goldstein added that the board followed the recommendation of an outside investment firm. The allegations of mob ties were later cleared by an independent investigation, although the deal remains tied up in court.
Goldstein admits he's made some missteps over the years. But he insists that most of the controversies that have surrounded his company have had more to do with politics than substance. The son of a used car salesman and a mother who saw almost all of her family killed in the Holocaust, Goldstein said he takes great pride in being a company that does right by its community, employees and investors.
"All the money that we have made has always been plowed back into growing and improving the business," he said. "If we make a dollar, we use it to borrow $3, and then we have $4 to build a hotel or restaurant -- and that makes more money and jobs."
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