Encore Boston Harbor Land Sale Fraud Case Will Go to Trial

Posted on: December 16, 2024, 05:50h. 

Last updated on: December 16, 2024, 10:25h.

Philip Conneller Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.

A fraud and unfair trade practices complaint brought against Wynn Resorts by the former owner of the land on which the Encore Boston Harbor now stands will go to trial.

Encore Boston Harbor, Wynn Resorts, FBT Everett Realty, lawsuit, Suffolk Superior Court
The Encore Boston Harbor, above, stands on what was once a contaminated chemical plant. Controversy around the sale of the land persists to this day. (Image: Wynn Resorts)

The former landowner, FBT Everett Realty, accuses the casino giant of using concerns raised by the Massachusetts Gaming Commission (MGC) about one of FBT’s directors to pressure the company into agreeing to a price drop from $75 million to $35 million.

FBT acquired the land, a disused chemical plant on the Mystic River, in 2009 for $8 million. Casino gaming was legalized in Massachusetts two years later and FBT hit the jackpot when Wynn came knocking.

FBT claims it entered into a verbal agreement with the operator in 2012 to sell the land for $75 million if Wynn won the bid for the sole east Massachusetts gaming license.

Checkered Past

Wynn was ultimately awarded the license in 2015, but while the MGC was doing due diligence on FBT, it uncovered the checkered past of a former director, Charles A Lightbody, who retained a concealed interest in the company.

Lightbody had a criminal record and reputed Mafia ties. This was a concern for the MGC because of Massachusetts laws prohibiting felons from profiting from the casino industry. These later turned out to be overblown.

FBT’s directors, including Lightbody, were cleared of federal fraud charges in 2016 when a judge determined there was no law prohibiting a felon from profiting from selling an asset to a casino company, only from actual gaming operations.

Nevertheless, Wynn Resorts leveraged concerns about Lightbody to pressure FBT into accepting the $40 million for the land, according to the lawsuit.

False Claim

FBT claims Wynn falsely represented that the MGC would deny its casino license and the whole deal would be off unless the price was lowered. On Thursday, Judge Kenneth W. Salinger of Suffolk Superior Court agreed that there was enough evidence to support this claim.

However, Salinger dismissed claims against the MGC, determining that the regulator didn’t formally direct Wynn to lower the price. It merely raised concerns about Lightbody’s involvement.

Salinger’s decision paves the way for a bench trial in May or early June 2025.

The MGC’s decision to award the license to Wynn Resorts over the competing bid from Mohegan Sun and Suffolk Downs racetrack was a controversial one, not least of all because of the saga surrounding FBT. In 2018, MGC chair Stephen Crosby resigned amid allegations of bias toward Wynn, which he denied.