Mohegan Sun has spotted an opportunity in the difficulties of Wynn Resorts. The company has indicated it would be happy to buy the Encore Boston Harbor Casino, worth $2.5bn, if the current operator Wynn Resorts loses its case with the state regulator.

This would make the decision of the Massachusetts Gaming Commission a lot easier, as it now has an out in case Wynn Resorts loses its license.

Mohegan Sun no doubt will be looking for a good deal if it is to take over in this eventuality. It comes at a good time as deliberations on the case are expected soon.

Wynn Resorts’ troubles

The Boston Harbor Casino is not set to open until June 2019, but it could be under new management given Wynn Resorts’ troubles with the state regulator. It has been alleged that it secured its loan for this casino license unfairly and a rival has filed a lawsuit against them worth in the region of $3bn.

The rival in question is the Sterling Suffolk Racecourse, which is near to the new casino site. It was a participant in the bidding process for the casino license and is citing racketeering laws as part of its lawsuit against Wynn Resorts.

The defendant in this case, Wynn Resorts, allegedly “conspired to fix the application process, circumvent laws in place to prevent the infiltration of mob elements, and interfere and eliminate various regulations aimed at protecting the public at large”.

Casino gambling has been legal in Massachusetts since 2011 and, ever since, there have been numerous legal battles revolving around the issuing of licenses, as well as the potential casino sites.

Wynn Resorts says that the claims of Richard Fields, the unsuccessful license applicant for?Sterling Suffolk Racecourse, are frivolous and it is going to keep fighting the lawsuit.

Issuance of the license

In September 2014, the Massachusetts Gaming Commission issued the licenses to the Wynn Resorts Group. Now, the commissioner has investigators conducting checks into the company, as well as the ex-CEO Steve Wynn. Wynn is fighting his own battle in the courts, with numerous allegations concerning his sexual misconduct.

It transpired that Wynn Resorts had failed to disclose a number of issues during the licensing review process, such as the $7.5m settlement CEO Steven Wynn made with a manicurist.

One of the allegations made in the lawsuit against the group is that it is building this casino on a toxic waste site that contains extremely high levels of arsenic.

The lawsuit also claims that Wynn Resorts bought this location from a group that has associations with the chairman of the commission. However, the chairman Stephen Crosby recused himself from the deal.

The commission will make a decision as to whether or not Wynn Resorts is still an appropriate fit for the license.

When the allegations about Steven Wynn went public, the new casino was renamed as the Encore Boston Harbor Casino.

 

Mohegan Sun’s proposal

Talking about its commitment to take over this project, Mohegan Sun spoke to the Boston Herald. It said: “If that determination finds Wynn Resorts unsuitable to hold a gaming license in Massachusetts, Mohegan Sun is prepared to participate in a process that would assign that license to another operator — and enter into negotiations with the appropriate parties to acquire the facility under construction in Everett.

“Mohegan Sun has always believed it is the best choice as gaming operator and license holder for a Region A resort casino, and will be committed to opening the Everett facility in a timely manner should it get the opportunity.”

The company has already met with residents of some of the local neighbourhoods to see if they were in favour of Wynn Resorts losing their license.

If Mohegan Sun takes over the project, it will honour any previous agreement the Wynn made with the locals. It has also express its interest to the commission.

However, the mayor of Everett, Carlo DeMaria, has rejected Mohegan Sun’s proposal. As per the city’s prior agreement with Wynn Resorts, it has the ability to reject or approve and subsequent sale sot new parties.

The mayor said: “Mohegan Sun is not welcome to operate a casino in the city of Everett. We made a deal with Wynn Resorts to operate a 5-star international destination resort and I will never accept anything less — certainly not a gaming parlor that would be used to protect their interests in Connecticut at the expense of our community and residents.”

Time will tell

This is a case that has many twists and turns. The next big move in this story is for the Gaming Commission to determine whether Wynn Resorts is fit to run this casino. If not, there will be an interesting battle among other major operators to see who runs this casino upon opening.