Operator of Horseshoe Casino Cincinnati facing federal money-laundering probe

Caesars Entertainment facing new scrutiny in Ohio

The operator of Horseshoe Casino Cincinnati is facing a federal money-laundering investigation and recently withdrew its request for a gaming license in Massachusetts after investigators there raised questions about past business practices, Caesars Entertainment Corp. disclosed to investors late Friday.

As news of the federal probe broke Monday, the Ohio Casino Control Commission said it has requested a copy of the Massachusetts investigative report that caused that state’s top gaming enforcement official to conclude that Caesar’s “has not met its burden by clear and convincing evidence to establish its suitability” for a gaming license at Suffolk Downs racecourse in East Boston. The company said it “strongly disagrees” with that assessment, but withdrew its application “for the benefit” of the Suffolk project.

“The registrant notes that neither it nor its affiliates have been found unsuitable by any licensing authority,” said the company’s filing with the SEC. “Nonetheless, in light of these recent events, the Registrant cannot assure you that existing or future jurisdictions would not raise similar questions with respect to the Registrant’s suitability.”

A spokeswoman said Ohio’s top gaming regulator, Matthew Schuler, would be unavailable for comment until he has reviewed the Massachusetts report.

“As with all of our licensees, any negative information on a multitude of fronts could serve as a reason to open up a license investigation and potentially take action on a license, which could include fines, suspension or revocation," said Communications Manager Jessica Franks. "Once the commission has had an opportunity to assess the situation, we will have a better idea of whether any action might be necessary."

Officials with Rock Gaming, the Detroit-based owner of Horseshoe Casino properties in Cleveland and Columbus, could not immediately be reached for comment.

The Caesar’s Entertainment SEC filing said Massachusetts authorities “raised certain issues” about a hotel operator that was added to the project this year but recently terminated. The Las Vegas Review Journal said the hotel operator, Gansevoort Hotel Group, had an investor with ties to organized crime in Russia.

The filing also disclosed that the company was notified by the U.S. Treasury Department that it was investigating “alleged violations of the Bank Secrecy Act to determine whether it is appropriate to assess a civil penalty and/or take additional enforcement action against Caesars Palace (in Las Vegas). Additionally, the Registrant has been informed that a federal grand jury investigation regarding these matters is on-going.”

The company said it is “cooperating fully” with the federal investigation.

Gaming expert Bob Snyder, a California attorney who conducted gaming investigations during a 22-year law enforcement career in Los Angeles, said it’s too early to tell whether Caesars Entertainment’s problems in Massachusetts and Nevada will lead to regulatory problems in Ohio.

“I would anticipate Ohio would do their own review, gathering information from the other state and then do their own assessment and go from there,” Snyder said. “Maybe the whole thing’s unfounded. I don’t know. But it’s certainly reasonable for Ohio to say, ‘Get those documents. We want to look into it.’”

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