BOSTON — Massachusetts regulators have released details on their background investigation that led the group proposing a casino at Suffolk Downs to end its partnership with Caesars Entertainment.
The state Gaming Commission report Wednesday said its concerns included Caesars’ now-ended relationship with a New York hotel company subsidiary, an executive’s previous work in online gambling, and Caesars’ now-settled dispute with a high-roller over millions in gambling debts. The commission also cited Caesars’ nearly $24 billion debt.
“We strongly disagree with the staff recommendation and were prepared to thoroughly address each of the concerns raised by the report,” Caesars said Wednesday. “We withdrew our application at the request of and in deference to our partners in the project.”
The commission said it was concerned about Caesars’ now-ended licensing agreement for a Las Vegas hotel with a subsidiary of New York-based Gansevoort Hotel Group. The commission said a Gansevoort investor has been under scrutiny, though not charged, over alleged ties to Russian organized crime.
The commission also said it was concerned that Caesars Interactive Entertainment head Mitchell Garber previously headed two online gambling companies, PartyGaming Inc. and Optimal Payments LLC, that forfeited “substantial sums” in an agreement to avoid prosecution by New York federal prosecutors.
Caesars’ 2006-2007 dispute with a patron over millions in unpaid debt, which ultimately was settled, raises concerns about its catering to high rollers and handling of problem gambling, the commission said.
It also expressed concern about Caesars’ $23.7 billion debt if the national economy fails to recover or falls into another downturn.
Caesars said last week the commission has set unreasonable standards for prospective developers that are inconsistent with other jurisdictions.
The $1 billion proposed casino for Suffolk Downs, near Logan Airport, is one of three for eastern Massachusetts. The commission will approve only one under the state’s 2011 gambling law.
Voters in East Boston and neighboring Revere are scheduled to hold a local referendum on the proposal Nov. 5.