Posted on: December 16, 2024, 05:50h.
Last updated on: December 16, 2024, 05:50h.
A fraud and unfair trade practices complaint brought against Wynn Resorts by the former owner of the land on which the Encore Boston Harbor now stands will go to trial.
The ex-landowner, FBT Everett Realty, accuses the casino giant of using concerns raised by the Massachusetts Gaming Commission (MGC) about one of FBT’s directors to pressure the company into agreeing to a price drop from $75 million to $35 million.
FBT acquired the land, a disused chemical plant on the Mystic River, in 2009 for $8 million. Casino gaming was legalized in Massachusetts two years later, and FBT hit the jackpot when Wynn came knocking.
FBT claims it entered into a verbal agreement with the operator in 2012 to sell the land for $75 million if Wynn won the bid for the sole east Massachusetts gaming license.
Checkered Past
Wynn was ultimately awarded the license in 2015, but while the MGC was doing due diligence on FBT, it uncovered the checkered past of a former director, Charles A Lightbody, who retained a concealed interest in the company.
Lightbody had a criminal record and reputed Mafia ties. This was a concern for the MGC because of Massachusetts laws prohibiting felons from profiting from the casino industry. These later turned out to be overblown.
FBT’s directors, including Lightbody, were cleared of federal fraud charges in 2016 when a judge determined there was no law that prohibited a felon from profiting from selling an asset to a casino company, only from actual gaming operations.
Nevertheless, Wynn Resorts leveraged concerns about Lightbody to pressure FBT into accepting the $40 million for the land, according to the lawsuit.
False Claim
FBT claims Wynn falsely represented that the MGC would deny its casino license and the whole deal would be off unless the price was lowered. On Thursday, Judge Kenneth W. Salinger of Suffolk Superior Court agreed that there was enough evidence to support this claim.
However, he dismissed claims against the MGC, determining that the regulator did not formally direct Wynn to lower the price. It merely raised concerns about Lightbody’s involvement.
Salinger’s decision paves the way for a bench trial in May or early June 2025.
The MGC’s decision to award the license to Wynn Resorts over the competing bid from Mohegan Sun and Suffolk Downs racetrack was a controversial one, not least because of the saga surrounding FBT. In 2018, MGC chair Stephen Crosby resigned amid allegations of bias towards Wynn, which he denied.
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