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Caesars files lawsuit against Massachusetts gaming commission chairman

12 Dec 2013

By Howard Stutz
Caesars Entertainment Corporation filed a lawsuit against Massachusetts Gaming Commission Chairman Stephen Crosby, claiming the state’s top gaming regulator had several conflicts of interest that ultimately played into the casino giant’s departure from a proposed $1 billion Boston-area gaming complex.

The lawsuit, filed late Thursday in U.S. District Court in Boston, claimed Crosby’s “tortious interference” with Caesars partnership with the Suffolk Down Race Track violated the company’s “contractual rights to fair consideration” in the Massachusetts gaming license application process.

Caesars sued Crosby both individually and in his role as chairman of the gaming commission.

Among the charges listed included “Chairman Crosby’s conflicts of interest and his failure to timely disclose them.”

The company said Crosby failed to disclose his friendship and past business relationship with Paul Lohnes, a part-owner of land in Everett, Mass., for competing gaming complex operated by Wynn Resorts Ltd. Crosby announced last week that he would recuse himself from participating in the suitability hearing for Wynn next week.

Caesars said the “commission’s staff issued an incorrect and unprecedented recommendation” that the company had not met its burden” to establish suitability.

“Chairman Crosby and members of the commission’s staff have made untrue and misleading statements about plaintiffs and their affiliates,” according to the lawsuit. “Chairman Crosby deprived plaintiffs of their due process and equal protection rights and tortiously interfered with plaintiffs’ relationship with Suffolk Downs and right to fair consideration in the gaming suitability process.”

Caesars said the actions “caused and continues to cause” the company to suffer “reputational and economic injury.”

In October, the company’s partnership with the Suffolk Downs racetrack ended after state investigators found four areas of concern about Caesars’ potential suitability. Massachusetts’ commission’s Investigations and Enforcement Bureau recommended in an Oct. 18 letter to the commission that Caesars and Suffolk Downs be invited to come before the commission to establish suitability.

The partnership was dissolved before Caesars could address those concerns.

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