Major Player: Suffolk Enters into a Strategic Alliance with Caesar’s Entertainment Corp.

-By John Lynds

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In a move to show that they are serious about being one of possibly three resort-style casinos in the Commonwealth, owners of Suffolk Downs, Sterling Suffolk Racecourse, LLC have entered a strategic alliance with Caesar’s Entertainment Corporation, the world’s largest operator of gaming properties.

The agreement between the two companies will most likely bolster Suffolk Downs’ bid to develop and operate a world-class gaming and entertainment complex on the racetrack property should Massachusetts authorize expanded gaming this legislative session.

“Our alliance with premier gaming partner Caesars Entertainment will bring significant management expertise, marketing power and additional potential investment to enhance our ability to develop a gaming and racing complex commensurate with Boston’s status as a world-class city and tourism destination,” said Suffolk Downs managing partner, Richard Fields.

Fields, a casino developer, rancher and horseracing enthusiast, and Joe O’Donnell, a Cambridge based entrepreneur, philanthropist and the former owner of the Boston Culinary Group, are the principal shareholders of Sterling Suffolk Racecourse.

“We are excited to join Joe O’Donnell and Richard Fields in the Suffolk Downs venture,” said Caesar’s Entertainment Chairman and Chief Executive Gary Loveman, a resident of Massachusetts. “We look forward to working together in this exciting venture and to offering our 40 million Total Rewards members around the globe the wonderful experience of visiting this unique, historic area.”

As part of the agreement, Sterling Suffolk Racecourse retains control of the potential development of the property, including licensing, community relations and labor relations while Caesar’s Entertainment will manage a gaming facility at the track should gaming development occur at Suffolk Downs.  No decision has been made as to the branding of the facility, officials indicated.  Financial terms of the agreement between the two companies were not disclosed.

“Should Massachusetts authorize casino gaming, we believe that there is no stronger team in place nor any better venue than Suffolk Downs and we look forward to the opportunity to compete to develop this property to create jobs and new revenue for the state,” said Suffolk Downs Chief Operating Officer, Chip Tuttle.

Senator Anthony Petruccelli, who recently submitted a compromise casino gaming bill in the Senate, cosponsored by Representative Carlo Basile, that calls for three resort-style casinos and one racino in Massachusetts that would immediately bring million of dollars in revenue to the state through licensing fees, capital improvements and taxes.

Of the business partnership between Suffolk Downs and Caesar’s, Petruccelli said he will reserve judgment until he sees all the details regarding the agreement.

“I think the partnership between Suffolk Downs and Caesar’s is a natural progression by a potential bidder of casino license if casino gaming is passed in the state,” said Petruccelli. “With that said I would not comment further on the partnership until I see all the details of the agreement.”

Petruccelli said a legislative hearing on casino gaming will take place at the State House on May 4.

“I’m optimistic that with that hearing the House and Senate will begin to move on gaming legislation,” he said.

Last year, the state was closer than ever to passing casino gaming in the Commonwealth but Speaker Robert DeLeo wanted two slot parlors or ‘racinos’ at state racetracks and Governor Deval Patrick wanted none. Patrick came around and extended an olive branch to DeLeo and said he’d accept one racino but wanted them to be competitively bid by not only racetrack owners. DeLeo tried to out maneuver Patrick politically and waited for the governor to blink.

The governor took all the racinos off the table and said he was ‘done’ and the casino gaming issue died in late August 2010.

Petruccelli feels his bill is a good compromise to the polarizing politics that occurred up on Beacon Hill last year and subsequently killed gaming in the state.

“Last year we all agreed that casino gaming was something positive as a way to spark the state’s economy with revenue and job growth,” said Petruccelli. “While many agreed that three resort-style casinos was a move in the right direction it came down to the racino issue–the Speaker wanted two racinos, the governor came around to one but now is the time to get a bill everyone can agree on over the goal line and I think this bill can accomplish that.”

While Petruccelli is not sure if the Governor will sign his bill he hopes it satisfies the criteria the Governor has discussed in the past. Petruccelli added that he offers up the compromise bill as something both sides can begin to discuss and at least agree upon some of the major points.

“I have no pride of authorship with this piece of legislation,” said Petruccelli. “I offered it in order to inject a different idea to be a part of the conversation, because the issue is too important to the jobs creation agenda for the communities that I represent to not find a resolution.”

Petruccelli’s bill would authorize thee resort-style casinos (one in each of three defined regions of the state), authorize one racino awarded to an existing or proposed racetrack through the same competitive process used to award casino license and dedicate most upfront revenues ($260 million) to local aid.

The bill also creates the five-member Massachusetts Gaming Commission with the Governor appointing three members, the Attorney General and Treasurer both appointing one. The Governor would designates the commission chairperson according to the bill.

Caesar’s Entertainment Corporation is the world’s largest casino entertainment company. Since its beginnings more than 70 years ago, Caesar’s has grown through development of new resorts, expansions and acquisitions, and now operates casinos on four continents. The company’s resorts operate primarily under the Caesar’s, Harrah’s and Horseshoe brand names. Caesar’s also owns the gaming and hospitality industry’s leading affinity program, Total Rewards, the World Series of Poker and the London Clubs International family of casinos.

 

“Caesar’s Entertainment is focused on building loyalty and value with its guests through a unique combination of great service, excellent products, unsurpassed distribution, operational excellence and technology leadership,” said Tuttle. “Caesar’s is committed to environmental sustainability and energy conservation and recognizes the importance of being a responsible steward of the environment.”

Suffolk Downs currently conducts simulcasting year round and its live racing season runs from May through November.