Caesars Entertainment Corp. is ending its partnership with Gansevoort Hotel Group to transform Bill's Gamblin' Hall & Saloon into a luxury resort on the Las Vegas Strip.
Caesars executive vice president Jan Jones confirmed the move on Sunday, two days after the Suffolk Downs ownership group said it had dropped partner Caesars Entertainment from its bid to build a $1 billion resort casino at the Massachusetts racetrack.
Jones, in a statement, says the severing of the partnership with Gansevoort would have no impact on the Las Vegas project.
"We look forward to welcoming guests on schedule in early 2014," she said.
The move came after Massachusetts gambling investigators, during routine background checks of Caesars' business partners, found an investor in New York-based Gansevoort was alleged to have ties to organized crime in Russia, the Las Vegas Review-Journal reported Sunday.
Gansevoort president Michael Achenbaum, in a statement, says his company wishes Caesars continued success.
"We have worked diligently to create one of the projects of which we are most proud," he said. "However, in order to minimize any controversy for Caesars, we have agreed to end our role in the Las Vegas project."
Both Caesars and Gansevoort officials criticized the Massachusetts Gaming Commission for setting what they described as unreasonable standards for prospective developers. Gansevoort is not involved in the Boston-area venture.
"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," Achenbaum said Sunday. "No new facts have arisen since we passed the internal gaming compliance process of Caesars prior to the execution of our agreements."
Messages seeking comment were left after hours for the commission. Its investigation into the Suffolk Downs proposal and the role of Caesars, one of the gambling industry's largest companies, has not been made public.
Caesars announced last year that it had secured $185 million to gut Bill's Gamblin' Hall and convert it into an upscale hotel and club. The casino kitty-corner to the Bellagio was known as the Barbary Coast until 2007.
A new name will be chosen for the resort, which originally was to be called the Gansevoort Las Vegas.
Associated Press writer Martin Griffith of Reno contributed to this report.
This program aired on October 21, 2013. The audio for this program is not available.