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Archive for Thursday, February 12, 2004

Casino operator settles Missouri suit

Lawsuit alleged improper contact with state gaming commission

February 12, 2004

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— Station Casinos Inc. will pay $38 million to settle a lawsuit that claimed the company used improper contacts between its lawyer and a Missouri Gaming Commission official to obtain its Missouri gaming license in 1997.

The lawsuit focused on $500,000 in bonus payments made to the company's now-disbarred lawyer in Missouri, Michael Lazaroff. It claimed that phone calls between Lazaroff and then-Gaming Commission president Robert Wolfson gave Station access to inside information that allowed it "to improperly improve its application and proposed project to meet all of the commission's criteria."

The suit was filed by Fitzgeralds Sugar Creek Inc., joined later by the city of Sugar Creek and Fitzgeralds owner Philip D. Griffith.

Griffith will receive more than $25 million. Sugar Creek will receive $2.83 million, with the remainder going to attorneys.

Sugar Creek Mayor Stan Salva said the city would use the money -- which represents about 70 percent of its annual budget -- for road improvements.

Fitzgeralds Sugar Creek Inc. and Las Vegas-based Station Casinos were two of four companies seeking a license to operate a casino in the Sugar Creek area in 1993. The state commission had already approved four casinos in the Kansas City area, and at the time said it would only approve one more.

Station was granted the license in 1997. Fitzgeralds' was not granted a license, and its parent company, Fitzgerald Gaming Corp. of Las Vegas, later filed for bankruptcy.

A 2000 inquiry by the gaming commission found no wrongdoing on the part of Station Casinos, but did find more than 200 undisclosed phone calls between Wolfson and Lazaroff. Wolfson, who stepped down from the commission in 1998, denied giving any special treatment to Station's proposal.

Station admitted no wrongdoing, but was forced to give up its Missouri gaming licenses. It sold its Kansas City and St. Louis casinos to Ameristar Casinos Inc. in 2000.

That year, Lazaroff was convicted of mail fraud and filing false reports with the Federal Election Commission, and the Missouri Gaming Commission ordered the company to pay a $1 million fine.

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