Caesars Abandons Suffolk Downs Casino Project
It was a tumultuous weekend for Caesars Entertainment, which was forced to walk away from its plan to build a new casino in East Boston in conjunction with the Suffolk Downs racetrack, also the proposed location for the new $1 billion casino project.
Gansevoort investor flagged by regulators
At issue is a German investor in the Gansevoort project, which is part of the renovation of the former Bill’s Gamblin’ Hall on the Las Vegas Strip. During standard background checks, the investor in question was found to have possible ties to Russian organized crime, according to a report in the Las Vegas Review-Journal.
The Hotel Gansevoort is a posh hotel located in New York. As part of the nearly $200 million of the old Bill’s property, a new, Gansevoort-branded luxury hotel was meant to occupy the space, which was also slated to feature new dining, nightlife, and other amenities.
After Massachusetts state gambling regulators uncovered the alleged criminal connections of the Gansevoort investor, company president Michael Auchenbaum was quick to dismiss the findings, saying that Massachusetts officials “relied on an outdated item from a New York gossip column to reject Caesars Entertainment.”
Said Auchenbaum, “We would have expected a serious government agency to act on the basis of substantiated fact, not rumor or innuendo previously printed in gossip columns. No new facts have arisen since we passed the internal gaming compliance process of Caesars prior to the execution of our agreements. We have worked diligently to create one of the projects of which we are most proud. However, in order to minimize any controversy for Caesars, we have agreed to end our role in the Las Vegas project. Gansevoort wishes Caesars and its team continued success.”
Caesars subsequently dropped the Gansevoort from its Nevada renovation project, saying that it will announce re-branding plans for the new hotel in the old Bill’s space in the future.
Massachusetts touted as next big American gambling center
Only a few weeks ago, Caesars chief executive office and Boston native Gary Loveman was talking up Boston as having the potential to become the next big gambling center in the United States. The company was in competition to receive one of three land-based casino licenses expected to be issued by Massachusetts gaming officials early next year. The state will also be licensing one company to operate a slots-only gambling parlor.
Over the weekend Loveman expressed surprise that it had been dropped by Suffolk Downs to Bloomberg News, saying, “We certainly did not expect to have trouble.”
Loveman also noted that the company had done its own investigation of Gansevoort and its investors, which did not turn up anything suspicious.
“We believe the Commission is attempting to set standards of suitability that are arbitrary, unreasonable and inconsistent with those that exist in every other gaming jurisdiction. Following discussions with our partners, and in light of the Commission’s approach as well as our minority stake in this project, Caesars has determined it is in the best interest of the company to focus on our 54 properties around the world as well as other growth opportunities,” Caesars said in a written statement issued in response to the Massachusetts developments.
For its part, Suffolk Downs said over the weekend that it is not giving up on its expansion project. The racetrack plans to seek out a new partner.
