MA Gaming Commission Chairman Sued by Caesars

Caesars Entertainment this week filed a lawsuit against the head of the Massachusetts Gaming Commission, Stephen Crosby, reported Bloomberg Businessweek.

The suit alleges that Crosby failed to disclose a conflict of interest as well as didn’t give Caesars fair consideration when investigating the company for suitability to operate in the Massachusetts casino market.

Caesars does not specify damages

In the lawsuit filed this week in federal court in Boston, Caesars does not name specific damages. The company is suing Crosby personally and has also filed suit against him in his professional role as the Chairman of the state’s Gaming Commission.

“The commission’s staff issued an incorrect and unprecedented recommendation that plaintiffs had not met their burden to establish their suitability, and Chairman Crosby and members of the commission’s staff have made untrue and misleading statements about plaintiffs and their affiliates,” the lawsuit reads.

For his part, Crosby denies that he was involved in the mandatory background checks that eliminated Caesars from the competition to win one of the highly-coveted land-based casino permits that will be issued in Massachusetts early next year.

Crosby’s connection to Everett landowner also cited

Caesars also alleges that Crosby cannot be impartial in his capacity as the head gaming regulator in the state, as he has ties to a man who is part owner of a piece of land in Everett that will become the home of a new Wynn Resorts casino should that company be selected to receive the lone Boston-area casino license.

Crosby was business partners with the man in question, Paul Lohnes, and also served with him in the National Guard. In responding to the suit, Crosby denies any wrongdoing and said that he disclosed his relationship with Lohnes to Massachusetts Governor Deval Patrick earlier this year.

Caesars beat hasty retreat from Boston casino plan

Earlier this fall, Caesars made an eleventh hour exit from a partnership with Suffolk Downs to put a new land-based casino at the existing site of the historic East Boston racetrack.

After Caesars was warned that a routine background investigation had uncovered possible criminal ties to an investor in a Nevada hotel redevelopment project, it quickly withdrew its Massachusetts application, leaving Suffolk Downs to go it alone in a must-win November 5 public referendum.

Without a casino partner, East Boston voters were said to be confused by the casino plan and did not approve it at the polls. Nearby Revere, however, did approve the plan, prompting Suffolk Downs to work to reconfigure its proposal so that the entire casino would be located over Revere lines.

Suffolk Downs also found a new casino partner in Connecticut-based Mohegan Sun, another casino that was rejected by voters – this time in the town of Palmer, Massachusetts. The plan is likely to head to a vote yet again, with the state Gaming Commission finding in favor of holding another vote, likely to take place in February.

Absent a win for Suffolk Downs and Mohegan Sun at the polls, Wynn’s Everett plan will be the only casino proposal left for Boston. The company chalked up a decisive win at the ballot box last June, with the majority of Everett residents favoring Wynn’s $1.2 billion casino plan.