Oct. 29–Caesars executives were told of potential licensing problems back in April but never flagged Suffolk Downs until this month, when the companies suddenly parted ways, officials said today.
Massachusetts gaming investigators, including state police, questioned Caesars officials in Las Vegas in April about the company’s ties to Gansevoort hotels, but the concerns weren’t passed along to Suffolk Downs until early October, former Attorney General Tom Reilly, an investigator hired by the racetrack, told the state gaming board today.
“Suffolk was totally in the dark,” Reilly testified. “Suffolk was blindsided with this.”
A 600-page gaming board report flagged several reasons Caesars should not be licensed in Massachusetts, including a Gansevoort executive’s reputed ties to the Russian mob. Caesars and Gansevoort had a deal on a Vegas hotel but the partnership has since been canceled. The report also raised concerns about Caesars $24 billion in debt.
Reilly called the issues relayed to Caesars officials in April “real, serious, legitimate concerns.” He said Suffolk Downs officials didn’t learn about the issues until Oct. 2 when track officials were briefed by gaming board investigators.
The report recommends that Suffolk Downs be found suitable if Caesars is removed from the deal. The gaming board is grilling Suffolk Downs officials today at the Boston Convention and Exhibition Center.
Suffolk Downs and Caesars mutually broke ties because of the bombshell report and the track is looking for a new gaming partner. A vote on the proposed casino is slated for next Tuesday in East Boston and Revere.
Caesars officials said they “shared all pertinent information regarding the suitability investigation with Sterling Suffolk” and was “equally surprised” by gaming investigators’ findings.
“As is customary during a suitability investigation, hired investigators questioned Caesars officials about a wide range of topics,” a Caesars statement read. “The idea that being questioned about an issue constitutes adequate notice of a potential negative recommendation five months later is absurd.”
The Gansevoort executive at the center of the controversy, Arik Kislin, released a statement tonight that read, in part:
“Caesars was well aware of the so-called rumors about Arik Kislin from information and full disclosure that Kislin himself provided to the company as he was negotiating the deal. The fact that there are no ties at all to organized crime, just innuendo and tenuous associations at best, seems to have been left out of the paradigm to cover up the real issue: That Caesars’ had its own set of serious problems enough to sink the deal without having to blame it on Kislin.”
The statement continued: “The truth here is that no legal authority has ever accused Kislin of any wrongdoing in connection with his businesses. The German court documents referenced in some media reports never mention Arik Kislin and never linked him to any criminal activity, and other reports are decades old, stemming from a time when Arik Kislin was in his early twenties and did business with individuals in the former Soviet Union.”
