.Delaware North finds itself back in the courtroom. Lawsuit filed from the hospitality company in US Bankruptcy Court last week .
The 58 Casino of Jake works. The lawsuit claims Delaware North committedknowing and intentional bad faith behavior and malfeasance thatunjustly rewarded itself by charging inflated prices for:
Lead attorney for Suffolk OTB Bryce Friedman of Simpson Thacher and Bartlett released a statement stating, as reported in Newsday:
We expect the court will induce Delaware North to meet its own contract with Suffolk OTB and to open its books so we are able to demonstrate the entire extent of Delaware Norths misuse of its position as manager of Jakes 58.
Individuals know Delaware North as the proprietor of Mardi Gras and Wheeling Island casinos in West Virginia. It is also in the middle of a lawsuit using Miomni, a sports gambling operator.
Suffolk OTB accuses of never providing its fair share to the OTB, Delaware North, although Jakes 58 produced $158 million in gross earnings.
There were expenses as well as overcharging on building and operational costs. Delaware North used the OTBs advertising budget to fill empty hotel rooms and used OTBs trademarks.
The OTB lawsuit goes on to claim:
Hundreds of millions of dollars of VLT revenue have passed through Delaware Norths hands. However, Delaware North has diverted money because of the state and county into its hotel and other companies.
Delaware Norths secret business plan for Jakes 58 is easy: Prices are charged with Suffolk OTBsJakes 58 Casino so that Delaware NorthsJakes 58 Resort and Restaurant could earn money.
The OTB asserts to have confirmation of the redirected funds, that, according to the lawsuit, ought to have been paid to the County. Additionally, the OTB asserts Delaware North made almost 100 fraudulent construction requests, which resulted inmillions (of dollars) in overcharges, all of which favored Delaware North.
Besides wrongdoing, the suit claims Delaware Northhas obfuscated and willfully blocked Suffolk OTBs accessibility to documents to hide bogus accounting.
Delaware North also sought to keep the wool pulled Suffolk OTBs eyes refusing to deliver the 2019 operating budget to OTB before the eleventh hour so that Suffolk OTB will be unable to meaningfully review it before it was submitted to the Gambling Commission.
As if all of that was not enough, Delaware North supposedlyrefused to take responsibility for violations of state gaming regulations. The business charged Suffolk OTB $66,000 for casino gaming violations.
In total, Delaware North may face up to a $5 million in payment plus damages into the OTB. The OTB is also asking the court to nullify the contract with Delaware North so that it can look for a companion to manage Jakes 58 and attempt to get back on course.
Delaware Norths version is, as expected, very different. According to Delaware Norths spokesperson, Glen White, the company has not violated the contract.
White maintains the firm has conducted its business dealings with the OTB legally and abided by the agreement between the 2 parties.
White states that the claims from Delaware North have beencontrived.
He points out that Suffolks OTB operations havelanded in bankruptcy after decades of ineffective operations, Suffolk OTB, together with approval of the US Bankruptcy Court, turned to home-state, industry-leading Delaware North to grow and manage its video gaming operations.
Under Delaware Norths direction, the land has always outperformed financial projections, resulting in greater than expected returns for Suffolk OTB, the citizens of Suffolk Countyas well as the State of New York.
White also states that Delaware North has pouredcountless its own dollars in Jakes 58. He says that the infusion of money was supposed to get into aprofessionally-run business which produces millions of dollars to your state and community.
Along with Jakes 58, other racetracks and casinos operate in:
Additionally, it owns tourism places, resorts, and stadium catering services for a few of the largest sports teams on the planet.
Suffolk OTB looked to the casino, operated by Delaware Norths opening, to offset losses.
The casino, a video lottery terminal (slot machines) gaming performance together with over 1,000 machines, has seen much success as opening. It took in $322.9 million and had earned countless last month:
Delaware North is not the only one being sued.
The Village of Islandia recently confronted a challenge.?? Casino opponents maintain the zoning was accepted by the village for its casino. A district court judge ruled by the Villages and Delaware Norths favor and is awaiting appeal.
Huntington Station lawyer, Paul Sabatino finds the most recent lawsuit by Suffolk OTB surprising.
it is a classic example of no honour among thieves. Theyre turning on each other, and theyre cannibalizing each other.
It generates enormous strain on the village to have a second look at everything they did. … I dreamed that OTB along with Delaware North could have this sort of falling out.
Way Yuhl is blogger and a freelance writer. Way abandoned his position as a Business professor at Clark University to write full-time whilst traveling the world. He also holds a BA in Geography and an MBA in International Business. You can learn more about his travels at
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