Borgata Sues Ocean Casino for Poaching Key Staff to ‘Cripple’ Competitor

  • Borgata accused fellow Atlantic City casino Ocean of misappropriating trade secrets
  • Lawsuit claimed Ocean unlawfully hired execs with inside access to Borgata’s high rollers
  • An accused has refused to return his Borgata phone holding info on patrons worth $25m per year
  • Borgata said Ocean was its primary competitor for top-end casino customers in Atlantic City
aerial view of the Ocean Casino Resort in Atlantic City, New Jersey
Borgata’s lawsuit accuses Ocean Casino Resort of hiring six of its competitor’s ex-employees in an attempt to ‘cripple’ its business. [Image: Shutterstock.com]

Update: On September 10, a federal judge ordered William Callahan to return a Borgata-owned cell phone containing details of the casino’s highest rollers. A temporary restraining order also bans Callahan and Kelly Ashman Burke from making contact with customers of their previous employer. They must also refrain from making use of any of the operator’s confidential information or trade secrets in their current roles at Ocean.

Ocean went after six execs

Atlantic City’s Borgata Hotel Casino & Spa filed a lawsuit in Nevada on Thursday against Ocean Casino Resort, accusing it of poaching its key staff. The suit pursues claims that Ocean hired six ex-Borgata marketing executives with the intention to “cripple” its operation.

at least two of its former top-ranking executives breached the law

Borgata contends that the poaching violated non-competition agreements. It asserts that at least two of its former top-ranking executives breached the law by working for a competitor before a full year had passed since leaving Borgata’s employ.  

Case number 2:20-cv-01592 pits Borgata casino owner Marina District Development Company LLC against AC Ocean Walk LLC et al. The nature of the lawsuit is 890 Other Statutes – Other Statutory Actions. The cause is 18:1836(a) Injunction against Misappropriation of Trade Secrets.

Details of big spenders nabbed

The lawsuit focuses sharply on William Callahan and Kelly Ashman Burke, two ex-Borgata executives who now work at Ocean Casino Resort. It claims Callahan, who was hired by Ocean late July, was in charge of the Borgata’s high rollers, who would spend between $1.5m and $4m per visit.

high rollers who would spend between $1.5m to $4m per visit

Callahan’s high-end customers netted the Borgata casino $25m per year at minimum. Borgata officials state that, as recently as August 24, Callahan has refused to return a Borgata-owned cell phone containing the big spenders’ details, such as gambling preferences and personal mobile numbers.

The withheld phone also holds information on how much the casino would consider discounting players for heavy losses, and even how it would bend the rules on some games for them.

Playing for high stakes

While the Borgata tops Atlantic City’s ‘Big Nine’ casinos, its lawsuit points a finger at Ocean for being “indisputably Borgata’s direct and primary competitor for high-level casino customers in Atlantic City”, the Associated Press (AP) reports.

indisputably Borgata’s direct and primary competitor for high-level casino customers”

Ocean Casino Resort flopped under its former Revel incarnation, which closed its doors in 2014. Despite COVID-19 causing casinos in the New Jersey city to suffer a $112m Q2 loss, Ocean has enjoyed something of a renaissance since reopening in 2018. Based on revenue for 2020, it placed sixth in Atlantic City’s casino rankings. In addition, Ocean only earns a third of what the Borgata does, which makes the “direct and primary competitor” statement somewhat surprising.

AP stated that Ocean declined to comment, saying “it does not discuss ongoing litigation”.

In January 2019, it was reported that Luxor Capital Group, a private investment firm from New York, became Ocean’s major stakeholder. Ocean was part of Hyatt Hotels Corp. until it split in late 2019.

Atlantic City case, Nevada hearing

The case, which has been randomly assigned to Judge Gloria M. Navarro, was filed in Nevada. This is because the headquarters of Borgata’s parent company, MGM Resorts International, is based in Paradise, Nevada.

Despite the suit being heard in another state, the Borgata casino nevertheless maintains that Ocean’s hiring of its former executives breaches New Jersey state law concerning unfair competition. According to AP, Ocean would not make either Callahan or Burke available to answer questions last week.

The Borgata was the last Atlantic City casino to reopen following the COVID-19 shutdown. It returned to business on July 23, while the other eight casinos all opened on July 2.

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