Wynn Resorts Sued Over Claim It Rigged Boston Casino Bid

(Bloomberg) -- Wynn Resorts Ltd. and its former chief executive, Steve Wynn, were sued by a Massachusetts racetrack operator for allegedly rigging the application process to win a license to run the Boston area’s only casino.

In the lawsuit, filed late Monday, Sterling Suffolk Racecourse claims that construction of the casino at its Suffolk Downs location, as proposed by its partner, Mohegan Sun Casino, would’ve increased the value of the racetrack location. The racetrack operator accused Wynn Resorts of violations of the federal Racketeer Influenced Corrupt Organization Act and seeks more than $1 billion in damages. Under the racketeering law, that number could triple.

In addition to Wynn Resorts and Steve Wynn, the suit names as defendants Chief Executive Officer Matthew Maddox and former General Counsel Kim Sinatra. The suit also names FBT Everett Realty and Paul Lohnes, one of FBT’s owners. FBT sold the Boston Harbor casino site in Everett, Massachusetts, to Wynn Resorts.

The suit, the latest in a series involving the casino operator, comes as the Massachusetts Gaming Commission is preparing to announce whether it will permit Wynn Resorts to operate the $2.5 billion facility nearing completion in Everett, near Boston.

The company initially won the rights in 2014, but the gaming commission put them on hold after allegations of sexual misconduct against Steve Wynn led to his resignation in February. Wynn has denied the accusations. After the claims were disclosed, Wynn Resorts took the company’s name off the project, renaming it Encore Boston Harbor.

Steve Wynn, FBT Everett Realty and Lohnes didn’t immediately respond to requests for comment. The Massachusetts Gaming Commission, through spokeswoman Elaine Driscoll, declined to comment.

‘Frivolous’ Claims

“This lawsuit was brought by Richard Fields, an unsuccessful applicant for the license awarded to Wynn Resorts. His claims are frivolous and clearly without foundation,” Wynn Resorts said in a written statement. Fields heads Coastal Development LLC, a major investor in Sterling Suffolk Racecourse.

Sterling Suffolk Racecourse alleges that the proposed casino site had been endorsed by Boston’s mayor and that its application was superior to that of Wynn Resorts. But it claims that Wynn Resorts committed several illegal acts to win the rights to build on the contaminated industrial site in Everett that Sterling Suffolk Racecourse says was formerly owned by associates of La Cosa Nostra.

Those acts by Wynn Resorts allegedly included committing extortion to suppress voter turnout for a Suffolk County casino referendum, lying about its knowledge of ties between FBT and organized crime figures and making campaign contributions during the application period, in violation of the state’s gaming law.

“The Wynn defendants should have been denied a license for each of those reasons and would have been denied the license but for the misconduct alleged herein,” the suit says.

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