Ethics questions swirl around the chairman of the Massachusetts Gaming Commission as the panel inches closer to issuing casino licenses. The head gaming industry regulator is now a defendant in a lawsuit by a major casino company
Caesars Entertainment filed a federal court lawsuit this week accusing Massachusetts Gaming Commission Chairman Stephen Crosby of discrimination against the company so as to boost a rival casino development where a former business associate of the chairman stands to profit.
The lawsuit alleges Crosby was responsible for an unfavorable background investigation report on Caesars that caused the company to end its pursuit of a casino development at the Suffolk Downs race track. Suffolk Downs has now partnered with Mohegan Sun to bid for the lone casino license available in eastern Massachusetts.
The commission said in a statement the lawsuit is “without merit” and “Chairman Crosby had no role in the investigation, report, or recommendations.”
The suit questions Crosby’s impartiality in the casino licensing process because of his relationship with a co-owner of land in Everett, where Wynn Resorts wants to build a casino. The landowner, Paul Lohnes and Crosby have been friends for 40 years and were once partners in a publishing business.
Because of the potential conflict, Crosby did not participate in a commission meeting Friday at which the Everett land deal was discussed.
The commission voted 4-0 to approve a revised land deal that will see Wynn pay $35 million—rather than the original $70 million offered—for the Everett site.
Earlier this week, Crosby said he would recuse himself from a vote on the land deal, but would continue to fully participate in all casino licensing decisions.
"Every word I utter will be in public about this evaluation,and I think a fair and reasonable person will conclude that I can be objective."
One who does not see it that way is Gregory Sullivan, the former Massachusetts Inspector General who is now research director at the Pioneer Institute.
"What Commissioner Crosby said is that he is going to recuse himself from any deliberations about the land, but not about the awarding of the casino for the land, so this is about a windfall profit of tremendous proportions."
Michael Kogut, who is chairman of Springfield’s anti-casino group Citizens Against Casino Gaming said the controversy involving Crosby undermines public confidence.
" We can see that this industry just permeates the entire regulatory process, and I think the public now is going to be suspect about the integrity of the process in Massachusetts."
Kogut’s group wants another commissioner on the five-member regulatory panel to stay on the sidelines when it comes to deciding if MGM Resorts can proceed with a plan to build an $800 million casino in downtown Springfield.
The group says Commissioner Bruce Stebbins’ previous work as a city official directing business development makes it impossible for him to be impartial.
" You've got a commissioner who was a former economic development director, who I do not believe can be objective about economic development in the city of Springfield and MGM Resorts International," said Kogut.
The gaming commission, in a statement, said, “Commissioner Stebbins has complete confidence in his ability to conduct himself impartially.”