Mortgage holder takes over ownership of The Lodge at Belmont but very little expected to change

BELMONT — Craig K. Potts of Scottsdale, Arizona, a principal investor in The Lodge at Belmont took ownership of the enterprise in a foreclosure auction this week.

Potts, the founder and former chief executive officer of Cash Systems, Inc., the largest publicly-held company in the cash transaction processing business dedicated solely to the gaming industry, has had a mercurial relationship with the gambling venue. He was an equal partner of Marlin Torguson of the Torguson Gaming Group of Biloxi, Mississippi, when it acquired the former Lakes Region Greyhound Park from the Hart family in 2005. However, a year later, after the venue was renovated but before it opened, Potts sold his interest back to the Torguson Gaming Group. Then in November 2006 he granted an $8.15-milion mortgage on the property and business to Torguson (doing business as Belmont Track RE, LLC).

The partnership began to fray a year ago as the fortunes of The Lodge soured. In November, 2010 simulcast race wagering was suspended and 22 employees let go as the flagging economy and state tax on gambling winnings slowed action at the venue to a crawl. Between 2009 and 2010 The Lodge's handle, or value of total wagers placed, shrunk by half, from $28.8-million to $14.7-million as betting on simulcast thoroughbred racing plummeted from $16.6-million to $4.3-million. At the same time, The Lodge's revenues were halved, dropping from $6-million to $3.1-million. Since then The Lodge has offered various forms of charity gaming, including bingo, table games (poker, roulette and craps), a sports bar, pool tables and live entertainment.

Earlier this year Tony Tarbell of Keystone Management Company, Inc., a property management firm headquartered in Concord, who held a $700,000 first mortgage on The Lodge gave notice of his intent to foreclose. Potts and Torguson purchased Tarbell's mortgage and retired the debt.

Last month Potts foreclosed, but the original auction was postponed. Ultimately Potts NH RE, LLC was the lone bidder at $1,000 and acquired the property and business as coveyed by the original mortgage.

Rick Newman, general manager of The Lodge explained yesterday that the transaction was delayed to provide the New Hampshire Racing and Charitable Gaming Commission sufficient time to process the paperwork and licenses, enabling operations to continue uninterrupted as ownership was transferred. In a prepared statement Potts expressed his gratitude to the commission for licensing Potts Gaming, LLC.

"We never went dark and there were no lay-offs," Newman said. "It was a completely seamless transition." Newman said that he would oversee the gaming operations under the new ownership. He said that apart from changing the name of the venue, "everything will remain the same in the short-term.

With the repeal of the state gambling tax earlier this year, Newman said that The Lodge expects to restore simulcast wagering by the summer of 2012, which he said would add between 20 and 25 positions in pari-mutuel operations and another 10 to 15 in food and beverage services. He anticipated that bingo, which is now offered twice a week, would be offered seven days a week. The Lodge currently employs 44 people and has a payroll just short of $1-million.

Potts Gaming owns the Bingo Palace in Piedmont, Alabama, which is the largest bingo hall in the country, as well as Elite Gaming, with venues in Turks and Caicos and a 25-percent stake in Carib Gaming, a management company based int he Caribbean.

In September, Potts Gaming and the Alleghany Entertainment Group were among five bidders seeking to operate a slot machine parlors in Baltimore and Rocky Gap, Maryland.