Wynn Resorts unfairly secured the lone eastern Massachusetts casino license, a former rival charged in a lawsuit seeking up to $3 billion.
Sterling Suffolk Racecourse, which owned the Suffolk Downs racetrack on the East Boston-Revere border and was in contention for the license, filed the lawsuit in federal court and cited racketeering laws.
The defendants "conspired to fix the application process, circumvent laws in place to prevent the infiltration of mob elements, and interfere and eliminate various regulations aimed at protecting the public at large," the lawsuit alleges.
Since Gov. Deval Patrick and state lawmakers passed a law expanding gambling in Massachusetts in 2011, the state has witnessed a flurry of legal battles over licenses and proposed sites, as well as the openings of MGM Springfield and the Plainville slots parlor known as Plainridge Park Casino.
"This lawsuit was brought by Richard Fields, an unsuccessful applicant for the license awarded to Wynn Resorts," the Wynn company said in a statement responding to the newest court action, referring to the primary owner of Sterling Suffolk. "His claims are frivolous and clearly without foundation. We will mount a vigorous defense."
The five-member Massachusetts Gaming Commission granted the license to Wynn Resorts in September 2014. The commission's investigators are now looking into the company and its former CEO, Steve Wynn, after a Wall Street Journal report outlined allegations of extensive sexual misconduct.
The commission will weigh whether the company is still suitable to hold the license. Investigators say a $7.5 million settlement between Steve Wynn and a manicurist was actively kept from them during their review of Wynn Resorts before licensing.
Earlier this year, the casino was renamed Encore Boston Harbor after Steve Wynn's departure and construction has continued in Everett with a June 2019 opening date.
"While certain...bad actors have been forced out of the Wynn organization, and Steve Wynn's name has been wiped from its casino in order to appear to 'cleanse' the Wynn entities so as to attempt to retain the Region A License, this does not change the fact that the license could not have been awarded to the Wynn Defendants in the first place but for the RICO predicate acts which include those described herein," the Suffolk Downs lawsuit says, referring to the racketeering statute.
The lawsuit also alleges that Wynn received the license to build a $2.5 billion casino on a "toxic waste site loaded with levels of arsenic still so high that a child day care center would not be permitted to be housed there," despite remediation efforts.
The lawsuit also says Wynn bought the site from an entity that had ties to La Cosa Nostra associates and a friend of Stephen Crosby, the Gaming Commission chairman.
Crosby recused himself during a review of the land deal, saying he knew the co-owner of the site, Paul Lohnes, from the 1970s. They were in the National Guard together and later became business partners in the 1980s.
A lawsuit against Crosby filed by Caesars Entertainment, a partner dropped from the original Suffolk Downs casino proposal, was later dismissed. Separately, the State Ethics Commission dismissed a complaint against Crosby in 2015.
The owners of Suffolk Downs who filed the federal lawsuit on Tuesday named Wynn Resorts, current and former executives of the company, and FBT Everett Realty, which owned the Everett land before Wynn purchased it.
Sterling Suffolk was seeking to redevelop the Suffolk Downs land.
This post was updated with a response from Wynn Resorts.