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Suffolk Downs officials appear before Gaming Commission

The October surprise for Suffolk Downs, that its casino partner had been linked to organized crime and allegedly plied a high-roller with booze and pills, arrived during an Oct. 2 meeting between Suffolk executive Charles Baker and gaming regulators.
A week before Boston and Revere voters could cast ballots on plans to turn the racetrack into a resort casino, Suffolk Downs officials appeared Tuesday before the Massachusetts Gaming Commission, and discussed lessons learned by its failed partnership with Caesars Entertainment.
“I take everybody at their word, so I’m not saying that anybody deliberately misinformed us,” said Baker, who said in the future he would seek documents in addition to verbal briefings from potential partners.
Baker said while vetting Caesars, he read a Wall Street Journal article about Terrance Watanabe, a high roller who racked up $14.7 million in debt during four months in 2007 at Caesars’ Las Vegas properties, while staff allegedly “plied [him] with liquor and prescription pain medication,” and did not discourage him from making unwanted sexual advances to casino workers.
Baker said Caesars officials said they were resolving the allegations with Las Vegas regulators, and said he knew nothing of the company’s dealings with a man tied to Russian organized crime, even though Caesars had communicated with Spectrum Gaming investigators working on behalf of the Gaming Commission in April.
“Caesars knew full well that this was a serious matter,” said attorney Tom Reilly, the former attorney general, who was hired by Suffolk after Baker learned what the Gaming Commission investigators had discovered. He said, “Suffolk was blind-sided by this but acted very quickly to deal with it.”
Suffolk executives said they had no knowledge of Caesars’ involvement with Arik Kislin, a principal of Gansevoort hotels, whose company Blonde Management was linked to Trans Commodities, an alleged Russian mob front owned by his uncle. Caesars had entered a licensing agreement with Gansevoort in Las Vegas, but reportedly backed out of that deal after the commission’s investigation was made public.
Director of Investigations and Enforcement Bureau Karen Wells said that since Caesars has withdrawn from the application, she recommends a suitability finding for all the other Suffolk executives and owners, who are currently seeking another casino partner to join the development.
“We are very far along in design and construction drawings,” said Baker, who said Suffolk is meeting with gaming companies that have applied to do business in Massachusetts as well as companies that have not sought Massachusetts licensure and said he “fully expects” to identify a casino partner before the Dec. 31 phase two application deadline.
“Understanding the matter you just went through, are there additional steps in your due diligence that you’re taking?” asked Commissioner Bruce Stebbins.
“As you might not be surprised, I’ve spent a lot of nights sort of thinking about what we might have done differently in this event, and given that, there are some things we’re doing that are a little different,” said Baker, who shares a name with a gubernatorial candidate. He said Suffolk would “insist that all relevant documents be turned over to us.”
Baker also said the parting with Caesars is “amicable.”
“This is a uniquely vulnerable industry,” said Commission Chairman Stephen Crosby, who advised the developers, “There is nothing more valuable than someone whose job it is to say the unpopular thing.”
The uncertainty could extend into Election Day, Nov. 5, when Suffolk is scheduled to seek voters’ approval for a resort casino near Revere Beach, even without a casino partner.
Commissioner Ed McHugh noted Caesars brands are included within the host community agreement voters will be asked to approve.
“There’s actually a commitment to build a World Series of Poker room or rooms,” McHugh said.
“We will have a poker room of that standard and that quality,” Baker said.
The commission planned a second meeting Tuesday afternoon to discuss next Tuesday’s vote.
Suffolk Downs has reached out to the voting public to inform people of the situation, Baker said. An explanatory ad produced by the race track aired during the World Series.
The plans for 4,000 jobs, deals with local vendors and nearby entertainment entities would remain the same with the new partner, as would the architectural designs.
Some have previously commented skeptically about the $1 billion revenue projection contained in the host community agreement, including casino opponent and former mayoral candidate Bill Walczak, who said in a statement, “This projected gaming revenue number is ludicrous. This casino will have to clear more revenue than any casino in the Western Hemisphere.”
Steve Wynn, who along with Foxwoods, is competing against Suffolk Downs for the eastern Massachusetts casino license, previously expressed concern to the commission about the level of scrutiny applied by gaming investigators outside the Bay State’s jurisdiction.

“We're scared to death, chairman. We're scared to death, not that you won't pick us, but that you will,” Wynn told the commission on Oct. 17, just before Suffolk cut ties with Caesars.