Encore Casino License Racketeering Lawsuit Thrown Out

  • Former owners of the Suffolk Downs racetrack filed a federal lawsuit against Wynn Resorts
  • There was not enough evidence to sufficiently prove allegations of racketeering
  • Case may now be brought to a state court
  • More than $1bn in damages is being sought
lawyer working on documents in courtroom
A federal judge has dismissed racketeering complaints made by Sterling Suffolk Racecourse against Wynn Resorts, the company that won the Boston area’s casino license. [Image: Shutterstock.com]

Not enough evidence

A federal judge has ruled that there was not enough evidence of racketeering in a case brought against Wynn Resorts. 

The lawsuit had been filed by Sterling Suffolk, the owner of the Suffolk Downs racetrack until 2017. They gave evidence to the court alleging potential wrongdoing by Wynn Resorts. However, US District Court Judge Patti Saris tossed the case out due to lack of evidence.

could roll the dice in the state court in order to try and obtain damages of over $1bn

Judge Saris did note when dismissing the suit that Sterling Suffolk could roll the dice in the state court in order to try and obtain damages of over $1bn. 

However, Judge Saris also noted that Wynn Resorts could aim to block such a suit due to state law that prevents certain types of lawsuits from being filed against a party exercising its 1st Amendment right for petitioning the government.

In this particular case, this relates to Wynn Resorts “petitioning” for (and subsequently receiving) a casino license from the Massachusetts Gaming Commission for Encore Boston Harbor.

Evidence against Wynn Resorts

The evidence that Judge Saris did accept has merit involves a couple of different aspects of the Racketeer Influenced and Corrupt Organizations (RICO) Act.

One allegation is that Wynn Resorts was buying land in Everett for its casino despite some of the sellers having a criminal past. These people had given “false and misleading statements” when the gaming commission was questioning their interactions and links. 

Evidence was also given that Wynn Resorts made “false and misleading statements” to the state gaming commission in relation to allegations against the company founder Steve Wynn of sexual misconduct. For this, a fine of $35m was handed down to Wynn Resorts.

There were also issues with the company not disclosing interactions with potentially shady people in Macau, where the company currently has two casino properties. 

Dodging the lawsuit

As all of these activities led to Wynn Resorts winning a license for a casino in the Boston area, all of these activities are linked together (which is a requirement of the RICO Act), according to Judge Saris. 

However, the reason the lawsuit fell apart was due to the last requirement of the RICO Act. This requirement is that some of the possible activities that were illegal are still ongoing. Those who sold the Everett land to Wynn Resorts do not have a stake in the casino or the property, and Steve Wynn is no longer part of Wynn Resorts.

Therefore, Judge Sarris said: “the Court does not find that there is (or ever was) a realistic prospect that the association-in-fact enterprise will continue to operate into the future or that it is likely to conduct further racketeering activity.”

Further case to be heard

After Judge Saris dismissed the RICO claims, she also dismissed Sterling Suffolk’s other claims without prejudice. This will allow them to bring a state case against Wynn Resorts. 

Part of these other allegations is that Wynn Resorts was engaging in

unfair methods of competition and/or unfair and/or deceptive acts and practices.”

This was allegedly to the value of more than $1bn. Suffolk Downs also alleges that Wynn Resorts interfered intentionally in a deal being done between the Mohegan Sun and Sterling Suffolk. The aim of this deal was to have the Mohegan Sun operate the casino at the racetrack.