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Revere sues state gambling panel over rejection

A conceptual design of a proposed casino development by Mohegan Sun at Suffolk Downs, which was passed over by the state’s gambling panel in favor of a Wynn Resorts casino plan in Everett.Suffolk Downs/AP File

Unwilling to let go of its casino dreams, the City of Revere filed suit against the state gambling commission Thursday, alleging that the commission violated the law by choosing a Wynn Resorts casino in Everett as winner of the Greater Boston license last month.

The lawsuit asserts that the commission "acted arbitrarily and capriciously'' and "gave Wynn unequal (and better) treatment than other gaming applicants.'' The suit also charges that commissioners met in secret, in violation of the Open Meeting Law, during breaks in their public deliberations over which project would win the license.

The City of Revere strongly supported a competing Mohegan Sun proposal at the Suffolk Downs racetrack. Suffolk Downs has since said it would close as a result of the Wynn decision.

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The suit asks the Suffolk Superior Court to vacate the commission's selection of Wynn and to order the commission to award the license "in accordance with the Gaming Act," the lawsuit states.

Gambling commission spokesman Hank Shafran said that it is understandable that those who lose out on licenses "are going to be sorely disappointed."

"We have seen that intense disappointment express itself in a number of ways, including legal action and even false accusations of bias against the commission," Shafran said. "This latest effort is yet another manifestation of disappointment from invested parties after a lengthy evaluation and public deliberation process that was based solely on the merits of competing proposals."

In September, the gambling commission chose Wynn's $1.6 billion casino and hotel proposal for the Mystic River waterfront as the winner of the state's most lucrative casino license. In choosing Wynn by a 3-1 vote, the commission denied a license to a Revere-based casino plan by Mohegan Sun, planned for the Suffolk Downs racetrack.

Wynn's casino offering dominated the financial and economic comparisons between the proposals, with projections that it would create more jobs and pay higher wages, would spend more on goods and services with local businesses, and would invest more than twice as much in the physical construction of the resort.

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Those on the losing side of the long, exhausting licensing battle have not gone quietly.

Mohegan Sun cried foul within hours of Wynn's victory, blasting the commission's licensing process as defective and unfair to them.

Suffolk Downs, which stood to gain enormous lease payments from a casino on its land, sent the commission a blistering letter this month questioning whether Wynn's plan is viable and urging regulators to reconsider their choice.

The new lawsuit was filed jointly by the City of Revere and Local 103 of the International Brotherhood of Electrical Workers. IBEW represents 145 workers at Suffolk Downs, whose jobs will be lost when the 79-year-old track closes later this year, according to Revere Mayor Dan Rizzo's office.

The 49-page lawsuit alleges that the commission "did not give proper weight" in its deliberations to some of Mohegan Sun's strong points, such as its greater number of successfully negotiated compensation agreements with surrounding communities, and the fact that Suffolk Downs' ownership had committed to keeping open the racetrack if Mohegan Sun won the license.

"The commission knew that granting the Wynn application would likely result in the closing of Suffolk Downs and the loss of significant racing jobs," the suit states. "Yet the commission did not weigh this factor against Wynn."

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The lawsuit also alleges that the commission gave Wynn a greater chance to improve its proposal during the panel's final deliberations, through responses to conditions the commission proposed on each developer. And the suit alleges the Wynn application failed to comply with numerous legal requirements, including the requirement that casino developers negotiate compensation agreements with surrounding municipalities.

Wynn and Mayor Martin J. Walsh of Boston were unable to reach a negotiated agreement, and Walsh refused to participate in arbitration, leaving the commission to decide how much compensation Boston would get from the developer.

"The failure of Wynn to reach a deal with Boston, and the failure of the commission to give adequate consideration to that failure, violates statutory mandates," the lawsuit states.

The suit also takes issue with the commission's decision to use arbitration to settle disputes between casino developers and municipalities.

Since Wynn won the license, three men connected to the Everett land on which Wynn intends to build have been indicted for allegedly trying to hide the fact that a convicted felon had an undisclosed ownership stake in the land. The commission last December approved a plan by Wynn to slash the price of the land to deny any possible secret partners a premium price for the property.

"There are a number of troubling and alarming failures by the gaming commission that raise serious questions about the entire process of awarding the [Greater Boston] license," said Rizzo, in a statement. "From inequity in the process, to a failure to require adequate community mitigation, to ignoring potential criminal activity associated with the Everett land, the commission has in almost every regard failed to live up to its obligations under the Gaming Act."

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Rizzo has been one of the strongest casino supporters among Massachusetts public officials. He quickly struck a compensation deal with Suffolk Downs when the track had proposed a casino on the East Boston side of its roughly 160-acre property on the Boston-Revere city line. After East Boston residents voted down the plans last November, Rizzo urged track ownership to move their proposal entirely to the Revere side of the racetrack's property.

With Rizzo's support, the track struck a deal to lease about 40 acres in Revere to Mohegan Sun for a casino. The new application was up against a commission deadline late last year, and the developer asked for help from the commission to go forward. The board unanimously waived one of its rules to permit a new referendum in Revere after a scheduled deadline, keeping the Revere project alive.


Mark Arsenault can be reached at mark.arsenault@globe.com. Follow him on Twitter @bostonglobemark