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Donation illustrates NCAA's tough battle with casinos
Donation illustrates NCAA's tough battle with casinos
By David Strow
Las Vegas Sun
While the National Collegiate Athletic Association was gathering its forces to ban betting on college sports in Nevada's casinos two years ago, one of the NCAA's elite member schools was accepting a big donation of stock in a casino operator to boost its athletic program.
Georgetown University of Washington, D.C., accepted a donation of more than $750,000 from William Richardson, vice chairman of Mandalay Resort Group of Las Vegas, in early 2000 -- and the donation was made in the form of Mandalay stock.
No one is suggesting Richardson's contribution to Georgetown was improper, but the donation illustrates the difficulties the NCAA has in trying to ban betting on college sports while many of its member schools benefit directly or indirectly from the gambling industry.
Public disclosure of the donation came last month, when Georgetown filed a lawsuit in Las Vegas against a stock transfer agent over its handling of the Richardson donation.
Georgetown sold the shares in 2000 immediately after their receipt, in accordance with the university's policy on stock donations.
The donation was intended to fund a coaching chair in Georgetown's track and field department, according to a 1999 letter from Richardson to Georgetown's top donations official. In the letter, Richardson said he made the donation after discussions with Ron Helmer, Georgetown's track and field coach -- and wanted the chair named after his late father, Jack Richardson.
Richardson's daughter attends Georgetown, Georgetown spokeswoman Julie Bataille said. The gift was not publicized at Richardson's request, she said.
Richardson and Mandalay Resort Group officials couldn't be reached for comment on Richardson's donation.
About the same time Richardson made the donation, the NCAA was gathering support on Capitol Hill for its first push to wipe out wagering on amateur athletic contests Nevada.
Observers believe Georgetown's acceptance of the casino stock shows the NCAA and its member schools are inconsistent on the issue of gambling.
"They're embracing what it represents when they accept it," said Bill Thompson, professor of public administration at the University of Nevada, Las Vegas. "In a sense, it makes us clean, because the NCAA and Georgetown are saying, 'Their money is clean, their money is good, and we welcome their help with our athletic programs. Gambling stock is just like any other stock, and we want it."'
One of the NCAA's allies in the betting ban debate expressed concerns over what he viewed as a mixed message.
"It creates a question that undercuts their credibility," said Tom Grey, executive director of the National Coalition Against Gambling Expansion. "It would seem to me if you're going to take issue with gambling, then you're accepting money (from casino interests), it certainly becomes a concern for the NCAA."
Evidence
Grey said he believes Georgetown's initial silence on the issue is evidence the university knows there was a conflict.
"The fact Georgetown handled it this way says to me they didn't want this on the front page of the Washington Post," Grey said.
And it makes little difference in the eyes of both men that Georgetown chose to sell the stock instead of keeping it.
"I suppose if they would have kept the stock, voted the proxies and gone to shareholder meetings it would have made them more involved," Thompson said. "(But) whether they're selling it or keeping it, they're embracing what it represents when they accept it."
But the NCAA doesn't view it this way. Each university must determine for itself what donors are appropriate, an NCAA official said.
"The (NCAA) membership has never suggested we should be involved in determining whether the source of a donation is appropriate or not," said Wallace Renfro, spokesman for the NCAA. "What we're trying to accomplish (in Washington) is about legal sports wagering, not trying to address donations. If there are strings attached that puts an institution at harm, I would say the institution would have a problem with it. But it's not appropriate to narrow (donations) down to specific industries."
No conflict
And as far as Georgetown is concerned, there's no conflict over the donation.
"There is no conflict of interest for Georgetown in accepting money from a casino interest given that all of our donations are reviewed to ensure that they come from appropriate, philanthropically-minded sources," Bataille said. "In this case specifically, Mr. Richardson is an upstanding citizen who's only interest has been generously supporting an important need at Georgetown and we're grateful for his contribution."
Richardson's donation was part of a $1 billion fund-raising drive called the Third Century Campaign. The university has raised more than $700 million so far.
Bataille said donations to the university are tracked by names of donors, not by industry, so it is difficult to say how many donations have been from casino executives.
Donations of casino stock are not prohibited by NCAA regulations, Renfro said.
"Obviously, athletic departments and universities have contributions made all the time by many sources," Renfro said. "Universities have some fairly substantive and rigid restrictions on how those donations are made. We don't begin to try to step in and examine donations to an athletic department. It's up to the institutions."
The NCAA has been vocal about its opposition to links between the gaming industry and its member schools in the past. Ironically, the biggest debate on the issue, back in 1996, also involved Georgetown.
John Thompson, then the head coach of Georgetown's basketball team, struck a deal with close friend Michael Gaughan to buy a 10 percent stake in Gaughan's slot machine concession at Las Vegas' McCarran International Airport. News of Thompson's deal drew fire from the NCAA and Georgetown officials, and Thompson withdrew from the deal.
"It would be ill-advised for anyone connected to college sports to be involved, even peripherally, with gambling interests," NCAA Executive Director Cedric Dempsey said at the time.
Leading voice
After retiring from Georgetown, Thompson emerged as a leading voice against the NCAA's betting ban efforts.
"It's foolish to say it (college sports betting) is not part of our society," Thompson told the Associated Press Sports Editors Convention last June. "If you take it out of Las Vegas, every illegal bookie in this country will still be running books, and every kid that has no supervision will be vulnerable to it."
"There's a predisposition in Georgetown's athletic department to look on Las Vegas as a legitimate venue," Grey said.
The Richardson donation is hardly the only time casino dollars have backed NCAA athletic programs. In 2001, the University of North Dakota opened an $80 million hockey arena with the financial backing of alumni Ralph Engelstad, owner of the Imperial Palace on the Las Vegas Strip. And lottery funds have helped athletic programs in other states, including funds from an Oregon Lottery sports wagering game, Thompson said.
And just this week, the Nevada Gaming Control Board approved the transfer of $100,000 in stock in Jackie Gaughan's three downtown Las Vegas casinos to the UNLV Foundation, which benefits the University of Nevada, Las Vegas. The foundation intends to keep the stock and collect profit distributions from it.
"They're saying, 'Their money is clean, their money is good, and we welcome their help in our athletic programs,"' Thompson said.
It's likely the Georgetown donation would have never come to light, had a dispute not arisen during the transfer of the stock to Georgetown.
Richardson sent an order to Equiserve -- the company in charge of handling the transfer to Georgetown -- to send the shares to the university on Dec. 28, 1999. But Georgetown alleges the shares weren't transferred until April 2000.
By that time, the market value of Richardson's donation had shrunk from $1 million to $783,000. Georgetown sued Equiserve for the difference recently in Clark County District Court. Richardson is not a party to the lawsuit.
"Georgetown is asking for damages equivalent to what it would have received if the transaction was done by Dec. 28. But Equiserve offered only about $100,000 in discussions we've had," said Michael Feder, Georgetown's attorney. "Equiserve claims it couldn't have transferred the stock certificates even if everything had gone perfectly, until after the first week of January."
Equiserve could not be reached for comment.
Sun reporters Benjamin Grove and Grace Leong
contributed to this story.
By David Strow
Las Vegas Sun
While the National Collegiate Athletic Association was gathering its forces to ban betting on college sports in Nevada's casinos two years ago, one of the NCAA's elite member schools was accepting a big donation of stock in a casino operator to boost its athletic program.
Georgetown University of Washington, D.C., accepted a donation of more than $750,000 from William Richardson, vice chairman of Mandalay Resort Group of Las Vegas, in early 2000 -- and the donation was made in the form of Mandalay stock.
No one is suggesting Richardson's contribution to Georgetown was improper, but the donation illustrates the difficulties the NCAA has in trying to ban betting on college sports while many of its member schools benefit directly or indirectly from the gambling industry.
Public disclosure of the donation came last month, when Georgetown filed a lawsuit in Las Vegas against a stock transfer agent over its handling of the Richardson donation.
Georgetown sold the shares in 2000 immediately after their receipt, in accordance with the university's policy on stock donations.
The donation was intended to fund a coaching chair in Georgetown's track and field department, according to a 1999 letter from Richardson to Georgetown's top donations official. In the letter, Richardson said he made the donation after discussions with Ron Helmer, Georgetown's track and field coach -- and wanted the chair named after his late father, Jack Richardson.
Richardson's daughter attends Georgetown, Georgetown spokeswoman Julie Bataille said. The gift was not publicized at Richardson's request, she said.
Richardson and Mandalay Resort Group officials couldn't be reached for comment on Richardson's donation.
About the same time Richardson made the donation, the NCAA was gathering support on Capitol Hill for its first push to wipe out wagering on amateur athletic contests Nevada.
Observers believe Georgetown's acceptance of the casino stock shows the NCAA and its member schools are inconsistent on the issue of gambling.
"They're embracing what it represents when they accept it," said Bill Thompson, professor of public administration at the University of Nevada, Las Vegas. "In a sense, it makes us clean, because the NCAA and Georgetown are saying, 'Their money is clean, their money is good, and we welcome their help with our athletic programs. Gambling stock is just like any other stock, and we want it."'
One of the NCAA's allies in the betting ban debate expressed concerns over what he viewed as a mixed message.
"It creates a question that undercuts their credibility," said Tom Grey, executive director of the National Coalition Against Gambling Expansion. "It would seem to me if you're going to take issue with gambling, then you're accepting money (from casino interests), it certainly becomes a concern for the NCAA."
Evidence
Grey said he believes Georgetown's initial silence on the issue is evidence the university knows there was a conflict.
"The fact Georgetown handled it this way says to me they didn't want this on the front page of the Washington Post," Grey said.
And it makes little difference in the eyes of both men that Georgetown chose to sell the stock instead of keeping it.
"I suppose if they would have kept the stock, voted the proxies and gone to shareholder meetings it would have made them more involved," Thompson said. "(But) whether they're selling it or keeping it, they're embracing what it represents when they accept it."
But the NCAA doesn't view it this way. Each university must determine for itself what donors are appropriate, an NCAA official said.
"The (NCAA) membership has never suggested we should be involved in determining whether the source of a donation is appropriate or not," said Wallace Renfro, spokesman for the NCAA. "What we're trying to accomplish (in Washington) is about legal sports wagering, not trying to address donations. If there are strings attached that puts an institution at harm, I would say the institution would have a problem with it. But it's not appropriate to narrow (donations) down to specific industries."
No conflict
And as far as Georgetown is concerned, there's no conflict over the donation.
"There is no conflict of interest for Georgetown in accepting money from a casino interest given that all of our donations are reviewed to ensure that they come from appropriate, philanthropically-minded sources," Bataille said. "In this case specifically, Mr. Richardson is an upstanding citizen who's only interest has been generously supporting an important need at Georgetown and we're grateful for his contribution."
Richardson's donation was part of a $1 billion fund-raising drive called the Third Century Campaign. The university has raised more than $700 million so far.
Bataille said donations to the university are tracked by names of donors, not by industry, so it is difficult to say how many donations have been from casino executives.
Donations of casino stock are not prohibited by NCAA regulations, Renfro said.
"Obviously, athletic departments and universities have contributions made all the time by many sources," Renfro said. "Universities have some fairly substantive and rigid restrictions on how those donations are made. We don't begin to try to step in and examine donations to an athletic department. It's up to the institutions."
The NCAA has been vocal about its opposition to links between the gaming industry and its member schools in the past. Ironically, the biggest debate on the issue, back in 1996, also involved Georgetown.
John Thompson, then the head coach of Georgetown's basketball team, struck a deal with close friend Michael Gaughan to buy a 10 percent stake in Gaughan's slot machine concession at Las Vegas' McCarran International Airport. News of Thompson's deal drew fire from the NCAA and Georgetown officials, and Thompson withdrew from the deal.
"It would be ill-advised for anyone connected to college sports to be involved, even peripherally, with gambling interests," NCAA Executive Director Cedric Dempsey said at the time.
Leading voice
After retiring from Georgetown, Thompson emerged as a leading voice against the NCAA's betting ban efforts.
"It's foolish to say it (college sports betting) is not part of our society," Thompson told the Associated Press Sports Editors Convention last June. "If you take it out of Las Vegas, every illegal bookie in this country will still be running books, and every kid that has no supervision will be vulnerable to it."
"There's a predisposition in Georgetown's athletic department to look on Las Vegas as a legitimate venue," Grey said.
The Richardson donation is hardly the only time casino dollars have backed NCAA athletic programs. In 2001, the University of North Dakota opened an $80 million hockey arena with the financial backing of alumni Ralph Engelstad, owner of the Imperial Palace on the Las Vegas Strip. And lottery funds have helped athletic programs in other states, including funds from an Oregon Lottery sports wagering game, Thompson said.
And just this week, the Nevada Gaming Control Board approved the transfer of $100,000 in stock in Jackie Gaughan's three downtown Las Vegas casinos to the UNLV Foundation, which benefits the University of Nevada, Las Vegas. The foundation intends to keep the stock and collect profit distributions from it.
"They're saying, 'Their money is clean, their money is good, and we welcome their help in our athletic programs,"' Thompson said.
It's likely the Georgetown donation would have never come to light, had a dispute not arisen during the transfer of the stock to Georgetown.
Richardson sent an order to Equiserve -- the company in charge of handling the transfer to Georgetown -- to send the shares to the university on Dec. 28, 1999. But Georgetown alleges the shares weren't transferred until April 2000.
By that time, the market value of Richardson's donation had shrunk from $1 million to $783,000. Georgetown sued Equiserve for the difference recently in Clark County District Court. Richardson is not a party to the lawsuit.
"Georgetown is asking for damages equivalent to what it would have received if the transaction was done by Dec. 28. But Equiserve offered only about $100,000 in discussions we've had," said Michael Feder, Georgetown's attorney. "Equiserve claims it couldn't have transferred the stock certificates even if everything had gone perfectly, until after the first week of January."
Equiserve could not be reached for comment.
Sun reporters Benjamin Grove and Grace Leong
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