Massachusetts Court Deems Confidential Agreement between Wynn Resorts and Minority Owner Unenforceable

In a recent legal development, the Massachusetts Supreme Judicial Court has declared that a confidential agreement between Wynn Resorts and Anthony Gattineri, a minority owner of FBT Everett Realty, LLC, is not enforceable. This decision stems from a contentious situation surrounding the sale of land that later became Encore Boston Harbor, which raises concerns about secrecy and potential violations of public policy.

The controversy began when Wynn Resorts sought a casino license in Massachusetts and entered into a deal to purchase a parcel of land in Everett and Boston for $75 million. However, this transaction triggered suspicions about the land's previous owner, FBT, and its potential connections to a convicted felon with ties to organized crime. Consequently, the Massachusetts Gaming Commission decided to limit the sale price to $35 million, aligning it with the fair market value if the land was not intended for casino use.

Gattineri, who held a stake in FBT, claimed that Wynn had promised him an additional $19 million as part of a secret oral agreement, which was neither documented nor disclosed to the commission. This lack of transparency raised concerns about the agreement's legitimacy. The court's ruling emphasized that, in accordance with the Expanded Gaming Act, the primary public policy goal is to safeguard the integrity and public trust in the casino gambling licensure process. Consequently, any agreement conflicting with the commission's approved terms and concealed from regulatory authorities is deemed unenforceable.

In 2009, FBT initially acquired the land for approximately $8 million, a time when casino gambling was not yet legalized in Massachusetts. Initially considering the site for big-box retail, their plans shifted in late 2011 following the legalization of casino gaming.

Justice Scott L. Kafker, writing for the Supreme Judicial Court, emphasized the critical importance of preserving public confidence in the licensing process. The court's decision underscores the need for transparency and complete disclosure in transactions associated with casino licenses, especially when there are potential connections to organized crime.

In other recent news, Wynn Resorts' Encore Boston Harbor, along with MGM Springfield and Plainridge Park Casino, faced fines from Massachusetts regulators for accepting unauthorized in-state college bets during March Madness.

Last week, a Massachusetts consumer, Richard Schuster, alleged that Encore Boston Harbor and Wynn Resorts violated consumer protection laws by shortchanging customers due to technical issues with ticket redemption units and coinless machines at the casino. However, the court sided with the casino, stating that Schuster had sufficient information to redeem his change, leading him to appeal the ruling, while Wynn's attorneys seek to dismiss the case, asserting that no unfair conduct occurred.