Alleged Russian Mob Ties Causes Caesars to Part with Gansevoort

Whenever the big names of the casino industry buddy-up for billion dollar deals, it means a lot of money is at stake but a lot can also be earned. Everything is planned out extensively so nothing can go wrong. But before those pens sign the dotted line, the tenuous bond could break at the slightest sniff of something foul. For Caesars Entertainment Group, if that smell is coming from potential ties to the Russian mob, holding their nose isn’t really an option.

Goodbye, Gansevoort

It is those rumors of Russian mob relations that have caused Casesars to back out of dealings with its recent Las Vegas Strip partner, Gansevoort Hotel Group. Gansevoort was in the process of having their name be on the newest boutique hotel in early 2014. Gansevoort’s hotel would have been built on the site of Bill’s Gamblin’ Hall and Saloon which was opposite of the Bellagio and Caesars Palace.

The controversy began with accusations that one of Gansevoort’s investors had ties to a company that was linked with members of the Russian mob. This issue came to light when casino investigators were conducting background checks and found a New York Post report which tied Gansevoort funder Arik Kislin to the Russian mob. Though Vegas was somewhat notorious for organized crime, the Iron Curtain baddies are likely a tad bit more scary.

Was it Something We Said?

Russians gangsters are no doubt a great excuse to back out of a high profile deal, but Gansevoort’s questionable background may have burned Caesars. This whole issue came to light because of Caesars attempt at getting the winning bid for a $1 billion Massachusetts casino project in East Boston. The Massachusetts Gaming Commission cited several issues with Caesars in a report that was part of a background check in the company’s bid.

The biggest issue was Caesars relationship with Gansevoort. In what was likely a move for some massive damage control, Caesars cut ties with Gansevoort. “We would have expected a serious government agency to act on the basis of substantiated fact, not rumor or innuendo previously printed in gossip columns,” said a representative from Gansevoort.

Maybe it’s Massachusetts

Despite their move for damage control, Caesars still had to back out of the casino deal in Boston. While the deal was still in the making, Suffolk Downs was previously partnered with Caesars but the racetrack said there are plenty of big names looking to fill Caesars’ old shoes. Others looking to make the bid for the sole Boston casino license are Steve Wynn of Wynn Resorts and Connecticut-based Foxwoods casino.

As it turns out, though, rumors of the Russian mob are just one of the many excuses Massachusetts is giving for not making this process easy. Wynn is under scrutiny from the Massachusetts Gaming Commission because of his dealings in Macau. They claim that Chinese high-rollers who may have gained their money through illegal means are brought to Macau by third-party junket operators – a common practice there. Wynn claims he runs a tight ship there but it seems like guilt by the slightest hint of association is the norm so far for the Commission.

Better Luck Next State

Apparently striking a deal in Massachusetts is about as easy as winning the jackpot on a broken machine. Not only has Wynn spoken out with his frustrations, Caesars says that the gaming board is setting an impossible standard for any company. “We believe the Commission is attempting to set standards of suitability that are arbitrary, unreasonable and inconsistent with those that exist in every other gaming jurisdiction,” said a statement from the company.

Despite all the drama, it looks like Gansevoort is really getting the bad end of the deal. Caesars may be backing out of Massachusetts but their plans roll on without Gansevoort. The $185 million, 188-room hotel casino will get a new name, an Italian restaurant with Giada De Laurentiis’ name and a nightclub with a pool from Victor Drai. And in the world of Vegas, life moves on.

Sean Gibson
Written by
Sean Gibson
Sean Gibson has been an insider in the poker and casino industry for a number of years. Gibson has worked with many different media outlets and has covered events such as the World Series of Poker Main Event, the World Poker Tour Championship, and an infinite number of online events. He plays both 6-max and Full Ring No Limit Hold'em and can be found playing at either the Oceans 11 cardroom in Oceanside, CA or at Caesar's Palace in Las Vegas.

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