12/18/2008 1:00AM

Bankrupt shop's bettors could lose out


Bettors who had wagering accounts at bankrupt Hinsdale Greyhound Park in New Hampshire are being treated as unsecured creditors and are facing the loss of at least a portion of their money, according to the top official with the state's racing commission and the company's bankruptcy filing.

Hinsdale, which ran a rebate shop that gave bettors cash awards based on handle, abruptly filed for Chapter 7 bankruptcy and forfeited its racing license on Monday. Chapter 7 bankruptcy is for companies that do not plan to reopen and are seeking to liquidate all of their assets, as opposed to Chapter 11, in which companies use the protection of the court to reorganize.

The bankruptcy introduces troubling questions for customers of small account-wagering operations. Although many large account-wagering operations have sequestered bettors' accounts so that they are not subject to jeopardy in a bankruptcy filing or have secured customers' deposits with cash bonds in states that have licensed the operations, many others hold the money in accounts that are vulnerable to bankruptcy filings.

The Hinsdale rebate shop was relatively small by the standards of some offshore rebate shops. The bankruptcy filing indicates that hundreds of bettors are being listed as unsecured creditors of the track, with deposits in excess of several hundred thousand dollars.

Paul Kelley, the director of the New Hampshire Racing and Charitable Gaming Commission, said that New Hampshire does not have any rules that would require account-wagering operations to secure their customers' deposits. Under Chapter 7 rules, the judge in the case will determine the priority of paying off debt holders to the track.

"It's up to the judge where those people will be in line," Kelley said.

It can take a year or more for a liquidation process to conclude. Until the payment schedules are determined by the court, bettors will be unable to access the money that was in their accounts.

John Sullivan, the counsel for the track, did not return phone calls on Wednesday.

A number of individuals listed in the track's bankruptcy filing appear to be the shop's account-wagering customers. One had $138,000 in his account, another had $70,000, and another $51,000. The vast majority of the customers, however, are owed less than $250.

Among the track's other creditors are a number of racetracks that are owed simulcast settlements, including Hawthorne Park, which is owed $65,362; Laurel Park, which is owed $50,747; and Louisiana Downs, which is owed $44,273. In addition, the bet-processing company United Tote is owed $185,092. (Daily Racing Form is owed $11,068 for "racing programs," according to the filing.)

Hinsdale cut its live greyhound racing schedule this year to 50 days. The meet was unprofitable, and the animal-rights group that supported a successful ballot initiative in Massachusetts in November that banned greyhound racing had said that it would target the New Hampshire greyhound tracks next.

The track took down its website on Monday, and phone calls to the track have gone unanswered since then.