Biggest Gaming Industry Legal Conflicts, Battles, and Outright Wars of 2018
Posted on: December 25, 2018, 06:00h.
Last updated on: December 15, 2018, 09:18h.
The gaming industry kept its legal teams busy in 2018, as an onslaught of critical issues hit litigation — or threatened to — between casinos, ancillary businesses, federal, state, and tribal governments, and just plain old regular folks.
From determining the legality of complex tribal gaming matters, to a counter lawsuit brought against victims of the October 1, 2017 shooting from Mandalay Bay that created an almost instant public backlash, topics were wide-reaching.
Here’s a look back at the four biggest gaming industry legal cases of 2018.
Tangled Legal Web
A satellite casino in East Windsor — originally approved in 2017 — was Connecticut’s attempt to prevent as many gaming dollars as possible from flowing north across the Massachusetts border to MGM Springfield, a $960 million integrated casino resort.
Set to be a joint project of the Mashantucket Pequot and Mohegan tribes on non-sovereign land, the satellite casino legislation came with the caveat that the US Department of the Interior (DOI) sign off on the plan and confirm that it wouldn’t jeopardize the state’s tribal gaming compacts.
But DOI Secretary Ryan Zinke never issued an opinion on the satellite and how it related to the compacts, despite what many believed to be a requirement of his federal duties.
Then in late September 2018, a federal judge ruled that Zinke, in fact, had no legal obligation to approve or disapprove the compact amendments. The decision effectively stalled the satellite indefinitely, and allowed MGM Springfield to open with a wider regional gaming monopoly.
The East Windsor project’s future remains uncertain. State lawmakers plan to introduce legislation in 2019 that would remove the DOI requirement to authorize the satellite venue.
Multimillion Dollar Tribal Victory in California
A four-year long dispute between the Indians of Graton Rancheria in California and real estate development firm Kenwood Investments concluded in September, when an arbitration panel said the Native American tribe did not owe Kenwood $43 million.
The case stems from 15 years ago when the two sides partnered, with Kenwood hired to find the tribe land to build a casino. The Graton Resort & Casino opened in 2013, and that’s when relations soured.
Kenwood founder Darius Anderson argued he was owed four percent of the casino’s revenue during the venue’s first seven years in operation.
But arbitrators sided with the tribe’s argument that it would only share 2.5 percent because Kenwood failed to fulfill its obligations, most specifically that Anderson didn’t notify the tribe the land it was purchasing was under conservation efforts by a local group.
Wynn Resorts Encore Suit
The $2.5 billion Encore Boston Harbor — renamed from Wynn Boston Harbor after the casino company’s billionaire founder was disgraced amid alleged sexual misconduct allegations — has endured one challenge after another.
This case also began many years ago, and boils down to weather FBT Everett Reality — the company that sold Wynn Resorts the plot of land in Everett where the venue is being built — deliberately concealed a former stakeholder in the real estate company who had a criminal history and ties to the mob.
FBT sued Wynn Resorts for $18.6 million in June 2018 for allegedly not making good on a secret deal in exchange for its falsifying of ownership documents. And in September, Suffolk Downs, which was passed over for the Boston license, filed a $3 billion lawsuit against Wynn Resorts for alleging it knew of FBT’s association with Charles Lightbody, the aforementioned man in question.
The case is ongoing.
MGM Sues Shooting Victims
In what became the ultimate cause célèbre of 2018, MGM Resorts sued more than 1,900 victims of the October 2017 Las Vegas shooting in July 2018. Lawyers for the casino company said the litigation’s primary purpose was to expedite the legal process of settling claims made by said victims.
MGM CEO Jim Murren attempted damage control after a public backlash and boycott emerged in response to the lawsuit.
More than 2,500 people have filed or threatened to file legal claims against MGM Resorts. If these cases proceed, victims, which include MGM Resorts employees and families, first responders, and witnesses, would face the need to testify over and over again, traveling throughout various court rooms trial after trial,” Murren insisted.
“We believe MGM’s legal action benefits all victims by providing an opportunity for closure,” the chief executive concluded. But not everyone agreed.
In October, United State Judicial Panel on Multidistrict Litigation rejected the MGM lawsuit on grounds that “centralization will not serve the convenience of the parties and witnesses.”
MGM could try the tactic again in the future if many more victim suits are filed, however.
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