Caesars Entertainment Appeals Federal Judge Decision in Massachusetts Lawsuit
Caesars Entertainment will appeal a federal judge’s decision to dismiss its lawsuit against the top Massachusetts regulator, according to a notice filed with a U.S. District Court this week.
Last year, Caesars Entertainment sued Massachusetts Gaming Commission Chairman Stephen Crosby. The Las Vegas based gaming company claimed Crosby violated the company’s constitution right to due process and equal protection when he favored Wynn Resorts’ rival casino project in Everett. Since the decision, the field of potential winners for a Massachusetts casino license has narrowed to Wynn Resorts and the Mohegan Sun Tribe.
In the trial, Caesars attorneys claimed Crosby had made “untrue and misleading statements” about his connections to Russian mobsters, however tenuous those connections might have been. Stephen Crosby told The Boston Globe the gaming company’s allegations were “specious.”
Nathaniel Gorton: “A Shaky Foundation”
When U.S. District Judge Nathaniel M. Gorton dismissed the lawsuit in May 2014, he claimed Caesars case rested on a “shaky foundation”. In Gorton’s opinion, he used several strong phrases in lambasting the suit: “naked assertions”, “sensational accusations”, and “improbable inferences”.
After the verdict was announced, Caesars CEO Gary Loveman said the people of Massachusetts deserve to know the truth about the licensing process. He added that “Crosby’s failure to avoid the appearance of impropriety” had contributed to a lack of public trust in the ongoing license application process. An appeals court would need to have a diametrically opposed view from Nathaniel Gorton for Caesars’ appeal to meet with success.
Stephen Crosby Accused of a Conflict of Interest
Despite that fact, the decision has not deterred Caesars. The casino has appealed the decision, once again claiming Stephen Crosby had a conflict of interest when awarding the license to Wynn Resorts. Though most of the media attention has focused on charges about the Russian mob, the heart of the lawsuit involved Crosby ties to his 1980’s business partner, Paul Lohnes. Lohnes is one of the owners of the (industrial) waterfront land where Wynn plans to build. The value of the land increased significantly with the decision, which the Caesars believes is suspicious.
Stephen Crosby disclosed his relationship in state ethics filings, but he waited a year after he became aware of the possible conflict to do so. This is the key reason Caesars continues to pursue the legal option, because of the damage done to the process in that year-long interim. Since that time, Chairman Crosby has recused himself from the eastern region casino license deliberations. Crosby remains chairman of the Gaming Commission, though.
Caesars Entertainment and Suffolk Downs
Caesars Entertainment’s rival bid was in partnership with Suffolk Downs. The two planned a $1 billion casino project on the grounds of Suffolk Downs horse track. The development would have straddled East Boston and Revere.
Suffolk Downs asked Caesars to withdraw from the project after Massachusetts Gaming Commission investigators found ties to a hotel chain owned partly by a businessman with alleged ties to the Russian mob. Eventually, the project plan failed when the voters of Revere approved the development, but residents of East Boston rejected the proposal.
Round 2: Mohegan Sun vs. Wynn Resorts
Since that time, Mohegan Sun has proposed a $1.3 billion casino on the Revere side of the Suffolk Downs property. The Mohegan Sun proposal is seen as the only legitimate rival to the Wynn Resorts plan, which has developed its own issues. Since the Mohegan Sun plan was revealed, voters in Revere once again approved a casino project for their city.
In the spring, it was revealed that another one of the owners of the land in Everett had a criminal record. Gaming authorities in Massachusetts decided they would not approve the sale of the land to Wynn Resorts, because the man’s past had not been revealed properly. Eventually, the city council of Everett put forward a plan that would allow the city to buy the property from the ownership group for $40 million, then sell the land to Wynn Resorts at cost. The future of that plan remains in doubt at present.
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