Bad News Comes Fast and Furious for Caesars
It’s only Tuesday, but it is probably fair to say that Caesars Entertainment is already having a bad week.
After being forced to withdraw from a partnership with East Boston’s historic Suffolk Downs racetrack, the location of a proposed new casino, the company quickly announced that it was scrapping plans to rebrand one of its Las Vegas Strip Hotels as the Gansevoort, creating what would have been a western outpost of a fashionable Manhattan hotel.
Early Monday, word also broke of a fatal shooting inside a nightclub at Caesars-owed Bally’s in Las Vegas, and on top of it all, the company announced that it is being invested by federal officials for possible money laundering.
That is to say nothing of Caesars’ niggling debt load, which now amounts to more than $23 billion. Ouch.
Massachusetts regulators uncover nefarious investor connections
First, we head to Massachusetts, where for months Caesars has been talking up its plans to build a new casino at the site of Suffolk Downs, an East Boston institution dating back to 1935. In partnership, the two companies intended, if approved by Massachusetts gaming regulators, to construct a $1 billion casino resort on the site of the historic racetrack.
On Friday, Caesars announced that it was backing away from the deal after Massachusetts officials uncovered possible organized crime connections to an investor in yet another Caesars project, the above-mentioned Las Vegas Gansevoort Hotel development during customary background checks. That project was intended to be part of a $185 million renovation effort currently underway at what used to be Bill’s Gamblin’ Hall on the Las Vegas Strip.
The investor in question, Ukrainian-born real estate investor Arik Kislin, supposedly has connections to Russian organized crime figures, including an alleged hit man, according to a piece in the Las Vegas Review-Journal.
Caesars moved to abruptly sever ties with Gansevoort
Though both Caesars and representatives from the Gansevoort Hotel were quick to accuse Massachusetts gaming regulators of being unreasonable, Caesars swiftly cut its ties to Gansevoort, with the company saying that it would be moving in another direction with the Bill’s property.
In turn, Suffolk Downs also remarked publicly that it too would be seeking a new partnership deal, presumably with another casino company, as it attempts to move forward on the Massachusetts development.
Under Massachusetts state law, all casino plans must pass a public referendum before consideration will be given for licensing. The Caesars/Suffolk Downs project was set to go to a public vote on November 5, the same date that citywide elections will be held in Boston to elect a new mayor.
Good samaritan shot at Bally’s property early Monday
As word of Caesars’ hasty exit in Boston was spreading early Monday, news broke that a shooting occurred at Bally’s, a Caesars property in Nevada.
According to the Las Vegas Sun, a man with a record of criminal violence began shooting at the Drai’s After Hours nightclub at Bally’s after squabbling with employees about the cover charge. A club patron who tried to intervene was fatally shot.
Two security guards were also shot by the suspect, Las Vegas resident Benjamin Frazier. Frazier received a head injury in the scuffle and was taken to a local hospital. Upon release, he will be booked into jail on murder charges.
In the wake of the incident, Caesars released a statement that read in part, “The safety and security of our guests is our number one priority. Drai’s After Hours and Bally’s Las Vegas extend deepest sympathies to those injured by the shooter.”
Company plans to cooperate with feds in money laundering case
As if a failure in Massachusetts and a murder in Nevada weren’t enough, Caesars also publicized on Monday the fact that it is under federal investigation for purported money laundering at its iconic Caesars Palace property in Las Vegas.
Caesars is under investigation for violating the Bank Secrecy Act, says the Las Vegas Review-Journal. Officials for Caesars said that the company intends to fully cooperate with the grand jury investigation into the matter.
