As expected, the Massachusetts Gaming Commission fired off a broadside against Caesars Entertainment. It defended its Investigations & Enforcement Bureau as “comprised of seasoned investigators, [who act] independently to protect the public interest.” That’s partly a defense of the IEB against charges it bowed to pressure from MGC Chairman Stephen Crosby and partly to justify any differences of opinion the body might have had with consultants Spectrum Gaming Group.
Based on what I’ve read of the IEB’s report, Caesars and the MGC would have had issues, but no deal-breakers. (Except for Arik Kislin, whose background is seamier than Gary Loveman would like you to believe.) So now Caesars is suing Crosby for “tortious interference,” or kicking the ball off the fairway. The civil rights suit also protests “reputational and economic injury. Caesars wants the suitability report sealed, which is rather like asking the genie to return to the bottle, the document having been widely disseminated via PDF. (I’ve read a fair amount of it myself.)
(In an accompanying letter to Suffolk Downs, the Commission writes it “will not make any finding as to the suitability of Caesars.” It lauded the Downs for “swift and decisive action” when presented with “significant investigative issues” in re Caesars. It also requested verification by Nov. 8 that Caesars’ ownership had been divested. Crosby insists that Suffolk dropped Caesars of its own accord, but the distinction may be semantic.)
“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 suit reads, in part. It also charges IEB director Karen Wells with telling them that Caesars would be found unsuitable for Massachusetts licensure, in contradiction to Spectrum’s alleged favorable finding. It’s even claimed threats were made if it didn’t withdraw.
Spectrum denies it tipped the scales one way or another, stating, “Spectrum submitted a draft report to the IEB recommending that certain specified issues pertaining to Caesars’ suitability be addressed at an adjudicatory hearing, at which Caesars would be required to establish its suitability by clear and convincing evidence. Notably, Spectrum did not recommend a finding of suitability or a finding of unsuitability in its draft report.”
As for the IEB, it wrote (in part): “Therefore, the applicant, as presently constituted, has at this point failed to demonstrate the suitability of all qualifiers [i.e., Caesars] … If the qualifier at issue is not removed, the burden will rest with the applicant to demonstrate its suitability as presently constituted. The IEB recommends that the applicant be required demonstrate suitability at an adjudicatory hearing … The IEB also recommends that the Commission require the appropriate individuals to appear before the Commission to provide testimony on these issues.”
Caesars Interactive chief Mitchell Garber told me directly,[Massachusetts] has repeatedly stated they did not find against me. They had further questions which would have been addressed at a hearing had we and our partners not agreed to our withdrawal.”
Caesars further alleges an un-level playing field, with MGM Resorts International, Foxwoods Resort Casino and Wynn Resorts receiving favorable treatment. (Ironic, considering that Caesars was once thought a favorite-son candidate.) Crosby is charged with impugning Caesars’ compliance committee and with going to bat for Wynn, as well as for concealing his conflict of interest with the latter — he used to be in business with one of the owners of Wynn’s prospective Everett site. Crosby’s business ties to Paul Lohnes go back 30 years, when the duo published cable-TV guides.
From what I’ve read of it, the IEB report is noncommital, sometimes even laudatory of Caesars. Ergo, Crosby is the sole target of the lawsuit, which basically aims over, under and around the MGC itself. Not that Crosby doesn’t present a big target, having held casinos to one standard of conduct, himself to another. “You are in the gaming industry, where issues of appearance matter more than in other industries,” he once said, without irony.
It this point it’s difficult to see how Crosby stays at his post, more because of l’affaire Wynn than anything involving Caesars. The nightmare scenario floated by a few is that Massachusetts throws out its entire regulatory apparatus and casino-approval process and starts from Square One. Do we really want to go through all this again? And does the industry have the stomach for having to run this steeplechase twice?
Speaking of depressing timeline extensions, we might have one in Florida. State Senate President Don Gaetz wants any expansion of gambling put to a statewide vote. That opens other ticklish questions, such as whether Miami-Dade County could opt out of the vote, being casin0-enabled already. It looks like we’ll have to wait another year, at least, for clear resolution of this issue, always further complicated by the thorny fact of existing Seminole Tribe compact, which guarantees the state cash on the barrelhead.
Just another Loveman Fu#k Up. Is there a CEO in America with a longer list of failures that still has a job? Me thinks no.