2 new names in casino picture
Hard Rock, Rush Street may seek a role with Suffolk Downs
Two gambling companies familiar with Massachusetts, Hard Rock International and Rush Street Gaming, are emerging as top prospects to join a Suffolk Downs casino venture, days after the East Boston racetrack jettisoned Caesars Entertainment from the $1 billion project, say people familiar with the Suffolk Downs search for a new partner.
Suffolk Downs was sent scrambling for a new casino operator Friday, after learning that investigators performing background checks on casino applicants would recommend to the state gambling commission that Caesars be disqualified from bidding for a license, a shocking turn for one of the biggest names in the gambling business.
The casino project is facing a major shakeup just two weeks before a Nov. 5 East Boston referendum on the project. Over the weekend, Mayor Thomas M. Menino raised the notion of delaying the vote, but that will not be possible, said Secretary of State William F. Galvin.
“The ballots have been printed, they’ve been distributed,
and we know people have already voted,” said Galvin, referring to absentee voters. “Obviously we cannot have anything interfere with a municipal election.”
Galvin added that whichever side loses could potentially sue to invalidate the results based on an inaccurate description of an agreement between the city and Suffolk Downs printed on the ballot. The description mentions Caesars, which is no longer part of the project.
Suffolk Downs sought to regain its footing Monday by releasing a television campaign ad, in which the track’s chief operating officer, Chip Tuttle, explained that Suffolk Downs had “changed the company that will manage gaming operations here” but maintained its commitment to developing “a world-class destination resort.”
Opponents continued to pound Suffolk Downs Monday over disclosures that state investigators had red-flagged a licensing deal Caesars had signed with the boutique hotel company, Gansevoort Hotel Group. An owner of the group was reported in a 2012 New York Post story to have ties to Russian mobsters. Caesars severed the agreement after investigators cited it as a problem.
“Casino licensing in Massachusetts is now in the home stretch, and the city of Boston and Suffolk Downs have backed the wrong horse,” the anticasino group, No Eastie Casino, said in a statement urging Suffolk Downs to withdraw its application for the sole Greater Boston resort casino license.
Suffolk Downs confirmed Monday that it has new suitors within the casino industry.
“Because of both the attractiveness of the Boston area market and our premier location, there is interest from a number of best-in-class gaming companies on potentially partnering here,” Tuttle said in a statement to the Globe. “We are working diligently and in as timely a
‘We are working diligently . . . to identify a partner suitable to the [commission].’
CHIP TUTTLE Suffolk Downs chief executive officer
manner as possible to identify a partner suitable to the [commission] and acceptable to our host communities.”
He would not name the casino operators that are interested.
Hard Rock and Rush Street are strong candidates to replace Caesars for several reasons. Both companies are former Massachusetts casino applicants, already well known to state investigators. That familiarity is important because any new partner would have to pass the intensive state background check by the end of the year, when applicants must submit all documents needed to complete their bid. Investigators may not have enough time to vet an unfamiliar company, especially a large firm with overseas casinos.
Rush Street, run by Chicago billionaire Neil Bluhm, originally proposed a slot machine parlor in Worcester but failed to complete negotiations with city officials. The company then struck a deal with Millbury for a slot parlor in the central Massachusetts community, but opposition was fierce and Rush Street abandoned the project, citing a lack of community support.
Rush Street has already passed its state background check, which would remove any ambiguity over the company’s fitness to bid. Though not a household name in New England, Rush Street developed successful urban casinos in Illinois and Pennsylvania, including SugarHouse, in Philadelphia. The company declined to comment Monday.
Hard Rock was one of the first gambling firms to show interest in Massachusetts, as legislation legalizing Las Vegasstyle gambling moved toward passage two years ago. Hard Rock officials investigated a possible partnership with Suffolk Downs, before Caesars joined the East Boston venture in 2011. Hard Rock then pitched a casino in Holyoke, but moved on after the city elected a new mayor on an anticasino platform.
The company pursued a possible site in downtown Springfield, before proposing a casino in West Springfield on the grounds of the Big E fair. But West Springfield voters said no, defeating the proposal at a September referendum by 10 percentage points.
State investigators put the Hard Rock background check on hold after the company lost the vote, but the investigation is nearly done and could be completed before the year-end deadline.
Hard Rock also has a long history with Suffolk Downs principal owner Richard Fields; they developed two successful tribal casinos in Florida.
A Hard Rock spokesman would not comment on the company’s interest in Suffolk Downs but said generally that Hard Rock maintains “a positive outlook on the Massachusetts market” and “will continue to explore viable opportunities.”
Clyde Barrow, a casino specialist at the University of Massachusetts Dartmouth, said that “Hard Rock has a youthful image to it that might work in a city like Boston.”
Menino issued Suffolk Downs a vote of confidence. “Tell me what other thing will create 4,000 jobs,” he said at a public event Monday in Lowell. “. . . The 4,000 jobs will go to working people. That’s what’s important.”
The mayor said officials at the track are working overtime to find a new partner, but he does not know who that will be. “I’d like to see the casino part decided . . . as quickly as possible,” he said in remarks to reporters. “That’s why I’m asking them to move quickly on it and get it done before the Nov. 5 vote.”
Caesars’ lousy weekend continued into Monday, as the company declared in a Securities and Exchange filing that the US Treasury Department is investigating possible money laundering allegations at the company’s Las Vegas flagship hotel, Caesars Palace, according to a report by the Las Vegas Review-Journal.