Date: December 16, 2024, 05:50h.
Last updated on: December 16, 2024, 05:50h.
A legal complaint alleging fraud and unfair trade practices has been filed against Wynn Resorts by the previous owner of the property where the Encore Boston Harbor now sits and is set to proceed to trial.
The former landowner, FBT Everett Realty, alleges that the casino company manipulated concerns raised by the Massachusetts Gaming Commission (MGC) about one of FBT’s directors to coerce a reduced sale price from $75 million to $35 million.
FBT purchased the property, an abandoned chemical plant on the Mystic River, in 2009 for $8 million. Following the legalization of casino gaming in Massachusetts two years later, FBT benefitted when Wynn expressed interest.
FBT asserts that a verbal agreement was reached with the operator in 2012 to sell the land for $75 million if Wynn secured the exclusive gaming license for eastern Massachusetts.
Controversial History
Wynn was granted the license in 2015, but during the MGC’s scrutiny of FBT, it uncovered the questionable background of a former director, Charles A Lightbody, who had undisclosed ties to the company.
Lightbody had criminal convictions and alleged connections to organized crime. This revelation concerned the MGC due to Massachusetts laws prohibiting felons from benefiting from the casino industry, although these concerns were later deemed exaggerated.
FBT’s directors, including Lightbody, were acquitted of federal fraud charges in 2016 after a judge determined that there was no law prohibiting a felon from profiting from selling an asset to a casino company, only from engaging in actual gaming activities.
Despite this, Wynn Resorts allegedly used apprehensions about Lightbody to compel FBT into accepting the reduced $40 million offer for the property, as per the lawsuit.
Alleged Deception
FBT alleges that Wynn misrepresented that the MGC would reject its casino license and terminate the deal unless the price was lowered. Suffolk Superior Court Judge Kenneth W. Salinger recently ruled that there was adequate evidence to support this assertion.
However, he dismissed claims against the MGC, as he found no evidence that the regulator directed Wynn to negotiate a lower price. The MGC had simply expressed concerns regarding Lightbody’s involvement.
Salinger’s decision clears the path for a bench trial scheduled for May or early June 2025.
The decision by the MGC to award the license to Wynn Resorts instead of Mohegan Sun and Suffolk Downs racetrack was contentious, particularly due to the complications involving FBT. In 2018, MGC chair Stephen Crosby resigned amid accusations of favoritism towards Wynn, which he refuted.