Caesars: Fiasco in Boston

Suffolk Downs will be moving forward … without Caesars Entertainment. The track dropped Caesars like a bad habit over the weekend. Caesars tried to make it sound like the decision was its own. Spokesman Stephen Cohen threw a hissy fit, saying the Massachusetts Gaming Commission was “attempting to set standards of suitability that are arbitrary, unreasonable and inconsistent with those that exist in every other gaming jurisdiction.” Now Mr. Cohen, the MGC had long stated that the fiscal health of a company would be a criterion. Business ties to alleged Mob associates (see below) also tend to be frowned upon in most jurisdictions. “It’s going to be very difficult for sophisticated, multi-jurisdictional operators to tolerate the environment this commission has created,” CEO Gary Loveman responded in a characteristically phrased blast of hydrogen, doubtless feeling umbrage over the rejection from his home state. Industry apologist Roger Gros was also quick to play Chicken Little, wailing that “People could walk away and [Massachusetts] could end up with second-rate casino companies.” What a load of baloney. There are enough approved, first-tier operators already to ensure that scenario won’t come to pass. Two of them, Hard Rock International and Rush Street Gaming are still eligible to play in the Bay State — and Suffolk is talking to both.

A lack of due diligence seems to be to blame for the termination of the Gansevoort deal. Money man Arik Kislin is mooted to have ties to Russian organized crime. (Ditto Suffolk’s lack of research on Caesars, some say.) Whether Caesars didn’t know or knew and didn’t care, either it makes the company look like a carelessly run outfit. In the meantime, Caesars continues to do the only thing it really can: restructure its debt. The latest game of musical chairs was so elaborate it required a 900-page report to explain it. Do you think anyone will read the whole thing? Caesars tried to palliate Massachusetts by giving Gansevoort the heave-ho but the company’s $23.5 billion in debt was just too big to ignore. Loveman has a point when he harrumphs that “To apply this kind of standard to what was a trademark license — a passive business venture unrelated to gaming — is just extraordinary,” but he still comes off sound liking he knew about l’affaire Kislin and didn’t give a tinker’s damn unless forced to. Such a cavalier attitude says much about how Caesars got into this pickle. Caesars’ business relationship with i-gaming exec Mitch Garber also played a role in the adverse finding. (How Wynn Resorts and MGM Resorts International finesse their potentially tricky relationships in Macao has already been very interesting to see.)

A brand-new Treasury Department investigation into alleged money laundering would have hammered the last nail into Caesars’ coffin, regardless of other factors. And then there was the Terrance Watanabe scandal, which came back to bite Loveman in the butt. Suffolk Downs boss Richard Fields now has less than three weeks to find a new operating partner before the scheduled, Nov. 5 referendum on the casino, although Boston Mayor Thomas Menino wants the vote postponed.

Bottom line: There was no shortage of arrows with which the MGC could have shot down Loveman’s hot air balloon. The Gansevoort connection simply happened to be the sharpest.

“Really far out.” That’s how Steve Wynn describes the research being done on blindness at the University of Iowa, new recipient of his munificence, where mice are now carrying his DNA. The mogul bestowed $25 million on the school in part to make up for a lack of federal funding. Whatever his reason, anyone with failing eyesight should give Wynn a vote of thinks.

Dotty’s is taking its storefront-casino model and going on the road. Constrained by a lack of political clout in Nevada, it’s trying to make a go of it in Illinois and the early results look promising. Of course, the popularity of slot routes and little, demi-casinos gives the state’s big operators one less reason to be cheerful.