In a filing with the Securities and Exchange Commission today, Caesars Entertainment said Massachusetts gaming investigators raised red flags over three issues related to its proposed involvement in the Suffolk Downs project: One executive's past "employment by public companies in the internet gaming industry," the company's overall financial health, but most important, a "business relationship related to a license agreement for branding of a hotel that was entered into in 2013 (and recently terminated)."
The Las Vegas Review-Journal translates that last statement:
Massachusetts gaming investigators, during routine background checks of Caesars’ business partners, took issue with an investor in New York-based Gansevoort [which had a deal with Caesars to market a rebuilt Nevada casino].
The investor, a German businessman, is reputed to have ties to organized crime in Russia.
The Review-Journal says the report by Massachusetts gaming investigators - due for public release on Wednesday - took issue with the Gansevoort investor even though that company has nothing to do with the Suffolk Downs project.
As it has done publicly, Caesars criticized the Massachusetts investigation, which led Suffolk Downs to drop it from its proposal on Friday:
The Registrant notes that neither it nor its affiliates have been found unsuitable by any licensing authority. This matter related to the finding of an investigation that was delivered to a licensing authority, which has not made any findings. In addition, all but one of the issues raised by the Bureau, the license agreement for branding of a hotel, relate to circumstances that are at least several years old, and, to date, have not been the subject of a finding of unsuitability.
In the same filing, Caesars notes that the US Treasury is currently investigating possible money laundering at one of its Nevada casinos.
On Nov. 5, East Boston and Revere voters decide whether to let Suffolk Downs proceed with a $1-billion plan to add a casino and two hotels to the existing racetrack. Even if they approve, the state Gaming Commission will have final say on where to site a casino in eastern Massachusetts - there are competing proposals in Everett and Milford.