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HOME > NEWS > Investor News > Gaming advisement firm disputes Caesars' assertion of suitability

Gaming advisement firm disputes Caesars' assertion of suitability

16 December 2013

By Howard Stutz

A New Jersey gaming advisement firm disputed a claim raised in a lawsuit by Caesars Entertainment Corporation that it told Massachusetts regulators the casino operator should be found suitable to operate a Boston-area resort complex.

Spectrum Gaming Group LLC, which conducted a suitability background investigation of Caesars Entertainment for the Massachusetts Gaming Commission, said in a statement it did not make any recommendation in its draft report.

In a federal lawsuit Caesars filed this week against Massachusetts Gaming Commission Chairman Stephen Crosby, company attorneys wrote that Karen Wells, director of the state’s Investigations and Enforcement Bureau, failed to disclose to the commission that Spectrum recommended Caesars be found suitable.

The bureau, relying on Spectrum’s report, told the commission in October that investigators found four areas of concern about the company’s potential suitability. Caesars was eventually dropped from a partnership with the Suffolk Downs Race Track in a proposed $1 billion hotel and gaming development.

In a statement, Spectrum vice president of legal and regulatory services Steve Ingis said the company conducted a suitability background investigation of Caesars in conjunction with the Suffolk Downs project. He said Spectrum worked in conjunction with the Massachusetts State Police and the Investigations and Enforcement Bureau.

“At the conclusion of our investigation, 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,” Ingis said in the statement. “Notably, Spectrum did not recommend a finding of suitability or a finding of unsuitability in its draft report.”

A Caesars spokesman declined comment on the Spectrum statement.

In its lawsuit, Caesars said Crosby interfered in the company’s now-dissolved partnership with Suffolk Downs, saying his conflict of interest and actions caused the break-up.

Caesars spent $100 million in the failed effort to win a Massachusetts gaming license.

Attorneys wrote in the 33-page complaint that Crosby violated Caesars’ “contractual rights to fair consideration” in the Massachusetts gaming license application process. The company had a 4 percent ownership stake in the partnership and an agreement to manage the facility.

The company sued Crosby both individually and in his role as chairman of the gaming commission. The company is seeking unspecified monetary damages and wants Crosby, who had a 45-year career in state policymaking and entrepreneurship before being named gaming commission chairman, removed from the process.

Crosby told the Boston Herald he wasn’t fazed by the lawsuit.

“There’s big money involved here, there are big personalities involved here, and big passion involved here,” Crosby said. “I knew that there was going to be a lot of losers, as well as some winners. This sort of goes with the territory.”


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Howard Stutz
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