Wynn Resorts Avoids $19m Payment for Secret Land Deal

Wynn Resorts Avoids $19m Payment for Secret Land Deal

Time Stamp: November 7, 2023 10:19 AM

Not enforceable

Wynn Resorts does not have to pay $19m as part of a supposed secret land sale. The initially agreed upon price for the Encore Boston Harbor casino resort site was $75m before the Massachusetts Gaming Commission (MGC) capped the deal at $35m due to concerns over potentially undisclosed links between the seller FBT Everett Realty and Charles Lightbody, an individual with alleged ties to organized crime.

the aim of the lawsuit was to force the company to pay up

Anthony Gattineri owned 49% of FBT and claimed that then-Wynn Resorts Development Senior Vice President Robert DeSalvio promised to pay him $19m in return for him agreeing on paper to the $35m sale. The alleged secret payment would represent his cut of the $40m that was taken off the final purchase price by the MGC. Wynn never paid the $19m; the aim of the lawsuit was to force the company to pay up.

The Massachusetts Supreme Judicial Court ultimately decided that this supposed deal is not enforceable as it was concealed from the MGC and as a result violates public policy because it threatens public confidence in the integrity of the gaming licensing process. The court ruling also stated that FBT misled the gambling regulator’s investigators who were examining links with Lightbody.

A winding road

FBT Everett Realty purchased the industrial wasteland site in 2009 for $8m before casino gambling became legal in the state. Legislation in 2011 paved the way for the development of large-scale commercial casinos.

Wynn Resorts initially got the option in late 2012 to buy the land if it was the recipient of one of the three available commercial casino licenses in the state.

A spokesperson for Encore Boston Harbor said previously that the company would never agree to such a transaction without any paperwork or documentation as it is a “publicly traded company in a highly-regulated industry.”

The MGC eventually capped the deal at $35m as this sum represented the site’s fair value if it was not going to be the location of a casino. This cap was labeled as “highly unusual” in previous legal proceedings relating to the matter.

Charles Lightbody and two of the other FBT principals were federally indicted in 2014 for allegedly trying to hide his interest in the land by forging documents. All of them were acquitted.

Plenty of headaches

It has been one headache after another for the MGC regarding Encore Boston Harbor. The regulator’s first chairperson Stephen Crosby resigned from his role in 2018 following accusations that he showed bias in awarding a license for a Boston-area casino to Wynn. Rival casino company Mohegan Sun sued the commission over the selection process.

Wynn also got in hot water for allegedly hiding allegations of sexual misconduct involving the company’s founder and then-CEO Steve Wynn from the MGC. This resulted in the Las Vegas-based company having to pay a $35m fine to the regulator and nearly losing its license.

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