The other game

Vince Naimoli has seen his share of challenges on the field, as managing general partner of the Devil Rays. He also saw his share of challenges off the field, as a board member of several struggling casino companies.

By ROBERT TRIGAUX

© St. Petersburg Times, published July 30, 2000

For Vince Naimoli, lead owner of the last-place Tampa Bay Devil Rays, recent seasons have delivered their fair share of business crises.

And not just in baseball.

Outside the bright sports spotlight, Naimoli served for years as a director of several struggling companies in the casino gambling industry.

One company, Resorts International, stumbled through two bankruptcies before selling out in 1996 to a South African gambling enterprise. Another company, Players International, fell prey to a federal grand jury investigating an alleged bribes-for-casino-license scheme by an ex-governor of Louisiana and his pals.

Players International was not a target of the grand jury. And Naimoli joined the company's board in 1997, after the alleged wrongdoing and during the grand jury probe.

Investigators say the company funneled money to better its licensing chances and to stall those of competing casinos.

For that blunder, Players was fined more than $10-million late last year, threatened by the feds with the loss of its valuable Louisiana casino licenses and pressured to sell out in order to bring in fresh management.

At no time was Naimoli ever accused of wrongdoing. But after enduring years of hardball as a casino company director, Naimoli may see the plight of the Devil Rays at the bottom of the American League in a softer light.

By this past spring, the last of the gambling companies Naimoli served as a director was swallowed up by another casino operator. For the first time in years, Naimoli, who made his personal fortune as a Mr. Fix-It for troubled companies, is no longer a director of any publicly traded gambling company.

For Major League Baseball, such a resolution may bring a sigh of relief. Baseball has tried with mixed success to keep its distance from the gambling business. The sport still struggles with the taint of the 1919 Black Sox scandal, the result of eight Chicago players who allegedly threw World Series games. More recently, baseball superstar Pete Rose's lifetime ban from baseball for betting remains a sore point with a sport trying to market itself as the most family-friendly of pastimes.

Naimoli, who did not respond to a request for comment, previously has said he informed Major League Baseball and won clearance upfront for his role as a director of companies that run casinos. And none handled bets on baseball games.

But the line is blurring between the business of baseball and the surging popularity of gambling. The Internet already offers dozens of Web sites devoted to baseball and betting. An Indian tribe prominent in the casino business now is a sponsor of the San Diego Padres. The Las Vegas Convention and Visitors Bureau is spending $1.5-million to erect come-see-us signs in major league ballparks within easy traveling distance of Las Vegas casinos.

Las Vegas is edging closer to baseball in another way. This spring, Naimoli's Devil Rays and five other big-league teams met to discuss what once would be unthinkable: the possibility of moving their spring training camps to America's original "Sin City."

"I'm a little surprised to see Major League Baseball clinging to the past," says Chuck DiRocco, a 25-year Las Vegas resident and editor of Gaming Today, an industry trade publication. "They will have to come to grips with the fact that in the eyes of more and more Americans gambling no longer is that "dread' thing it used to be."

As closely as the media watches Naimoli as an owner of a major league baseball team, little has been reported about his role on the boards of casino businesses. Here's a glimpse of what he's been up to.

It's not that surprising that Naimoli, a successful businessman with roots in blue-collar Paterson, N.J., would end up in nearby Atlantic City as a director of a glitzy casino company. A big factor was Naimoli's ties to former TV talk show host and big-band crooner Merv Griffin.

Griffin created the megahit TV games shows Jeopardy! and Wheel of Fortune, then sold his production company to the Coca-Cola Co. in 1986 for $250-million. Griffin even soared briefly to the Forbes 400 list of the richest Americans. That wealth helped fund his major stake in high-end hotels and the casino business, a niche Griffin thought would further enrich him and serve as a new marquee for his entertainment career.

"Casinos were a big glamor business then," DiRocco says.

In 1988, Griffin took on Donald Trump in a bitter takeover battle for Resorts International, a gambling company that controlled the first casino in Atlantic City. Griffin won the fight but lost the war. He gained control of Resorts International but had to spend millions more to revive the company's aging boardwalk casino. Trump gave up Resorts but kept the new but unfinished Taj Mahal. The world's largest casino, it would come to dominate Atlantic City's gambling scene.

By 1989, Resorts International was awash in nearly $1-billion in junk bond debt. Griffin's company sought protection from creditors in Chapter 11 bankruptcy. A Saturday Night Live sketch depicted Griffin starring in a Resorts floor show, while he also waited tables, parked cars, took reservations and did the hotel laundry.

Griffin restructured, trying to revive Resorts and his tarnished reputation.

At the same time he began investing in Players International, an operator of riverboat casinos in Illinois, Missouri and Louisiana. Players was best known then for its pitchman, actor Telly Savalas of the TV series Kojack.

In 1994, even as Naimoli pushed hard to win a major league baseball franchise for the Tampa Bay area, Griffin invited him to join the boards of Resorts International and Griffin's affiliated company, Griffin Gaming & Entertainment. The same year, Resorts International was forced to restructure again in a second Chapter 11 bankruptcy.

By 1996, Griffin pulled the plug. For $210-million, he sold Resorts International and his Griffin Gaming to South African developer Sol Kerzner, who was looking to stake a claim in the U.S. gambling industry.

Though Resorts was in new hands, Naimoli and Griffin remained close. In 1996, Griffin had become the largest shareholder of Players International. He soon invited Naimoli to join that company's board of directors.

In March 1998, Naimoli invited Griffin and Trump to his black-tie party at Tropicana Field to celebrate the arrival of major league baseball to St. Petersburg. Neither attended. But a few weeks later, Naimoli spent the weekend in Los Angeles at Griffin's swank Beverly Hills, Calif., hotel and attended a party there with actor Tom Cruise, the Van Patten family and Playboy founder Hugh Hefner.

Before joining the Players International board in August 1997, Naimoli knew the casino company had a looming problem.

In April, the media had reported that a federal grand jury was investigating an alleged racketeering and extortion scheme by former Louisiana Gov. Edwin Edwards, his son, Stephen Edwards, and others who sought payoffs for casino licenses.

The federal investigation focused on Edward DeBartolo Jr., the then-owner of the San Francisco 49ers who admitted handing over $400,000 in bribes to Edwards to secure a casino license in the state.

(As a result of the investigation, DeBartolo was forced to turn over control of the football team to his sister. He later pleaded guilty to failing to report a felony, received a suspended sentence and was fined $1-million after agreeing to testify against Edwin Edwards. Last summer, he moved to Tampa.)

DeBartolo was not alone. Another company also allegedly paid money in 1995 under the table: Players International.

"The investigation was a serious issue in the casino industry," recalls Roger Gros, senior editor in Atlantic City of Casino Journal, an industry trade publication.

In Louisiana, Players had purchased the Showboat casino for $52-million, a sum that included $2-million investigators say was tacked on by Stephen Edwards as his payoff. Players never contested the higher price tag, and even hired Edwards as an attorney with a $15,000 monthly retainer. Later, Edwards arranged for a friend, pizza parlor operator Richard D. Shetler, to receive thousands of dollars in fees as a consultant to Players.

In fall 1998, Shetler pleaded guilty to funneling more than $550,000 from Players to the Edwardses.

A month later, a jury returned a 34-count indictment against Edwin Edwards, son Stephen and other defendants for their roles in extorting money from the riverboat casino industry.

Players was never a target of the grand jury, but the company was still in hot water.

Investigators focused on the decision by Players' executives to play along with the Edwards and Shetler extortion plan without disclosing the scheme to regulators.

In December, Players International agreed to pay the state government a penalty of $10.2-million (plus another $600,000 early this year) and sell its two Lake Charles, La., riverboats for its role in the extortion scheme for casino licenses. But Players continued to deny wrongdoing.

In January, the names of 58 people whom federal prosecutors wanted labeled as unindicted co-conspirators in the corruption trial were made public. Among them: six Players International executives, including Players co-founders Ed and David Fischman, former chief executive Howard Goldberg and other officers. Naimoli, who came to the board later, was not named, nor was his friend Merv Griffin.

Long before that penalty arrived, Naimoli and the other directors at Players International decided the company's future looked dark. The gambling industry was consolidating into fewer and bigger hands, and the company's outcome in the grand jury investigation was far from clear.

The best solution: Sell Players.

"Players had been looking for a buyer for years," Casino Journal's Gros says.

In February 1999, a willing but unlikely buyer emerged: Jackpot Enterprises. The Nevada company, which made an unglamorous living operating slot machines in Nevada supermarkets and drugstores, offered $424-million to buy Players.

Five times the size of Jackpot and eager to embrace a white knight, Players jumped at the deal.

But Jackpot, hoping to leap into a bigger casino league, had immediate problems. To buy Players, it needed to borrow heavily. And some of Jackpot's shareholders rebelled against the deal.

For Jackpot, the acquisition "is roughly equivalent to giving a loaded gun to a 3-year-old," Los Angeles investor Robert W. Nichols told the Las Vegas Review-Journal in 1999.

While Jackpot sought financing for the acquisition, Players' directors continued to shop the casino company.

In mid-August, Harrah's Entertainment, a giant casino corporation that caters to middle-market gamblers, made a $425-million offer for Players. The deal barely topped Jackpot's offer made six months earlier. But it appealed to Players shareholders, given Jackpot's modest size and Harrah's established brand in the gambling business.

Jackpot never made a counteroffer. (Early this year, Jackpot said it plans to leave the gambling business, change its name to JNet Enterprises and become an Internet investment company.)

Just days after the Harrah's/Players deal was announced, Louisiana investigators published a scathing report critical of Players' role in the extortion scheme.

Louisiana Assistant Attorney General Ray Lamonica asked the state's gaming control board not to renew Players' licenses, or to issue a conditional renewal with sanctions.

Harrah's still wanted to buy Players, but only if its Louisiana casino licenses remained intact. The $10.8-million in penalties paid by Players helped ensure those licenses would remain viable and that the Harrah's acquisition would continue.

The Harrah's deal was heavily criticized by gambling opponents. But local Louisiana business leaders in Lake Charles, where Players operated riverboat casinos with 1,657 slot machines and nearly 100 gaming tables, pushed for the deal because of the potential of lost jobs and revenue.

In March of this year, Harrah's completed its purchase of Players International. The Players riverboat casinos, now undergoing renovation by Harrah's, will be converted to the Harrah's name.

With Resorts International and now Players International in the hands of others, Griffin is busy investing in expensive boutique hotels in places such as California and South Beach. And Naimoli, at least for now, appears to have called it quits with the casino industry.

- Times researchers John Martin and Caryn Baird contributed to this report.

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