Pennsylvania: Ex-MTR chief sues gambling regulators

Ex-MTR chief sues gambling regulators
By Brian Bowling
PITTSBURGH TRIBUNE-REVIEW


Former MTR Gaming Group CEO Edson "Ted" Arneault claims in a federal civil rights lawsuit filed Friday that state gambling regulators published false and malicious allegations against him without attempting to first investigate the information.

Arneault, who lives in New Smyrna Beach, Fla., is joined in the lawsuit by Erie real estate agent Gregory J. Rubino, who claims the Pennsylvania Gaming Control Board also violated his constitutional rights by banning him from the industry since 2006 without explaining the decision or providing him with a chance to clear his name.

John F. Mizner, the Erie lawyer representing Arneault and Rubino, said the state's actions have cost both men millions of dollars in lost opportunities because no one in the gambling industry will do business with them.

"You have to have an impeccable reputation without so much as a hint of bad character or a hint of association with someone of bad character," Mizner said.

The 124-page lawsuit states the main source of the allegations against Rubino and Arneault is another Erie lawyer, Leonard Ambrose III. Ambrose successfully defended former Erie Mayor Rick Filippi in a 2006 public corruption trial in which Rubino was the main witness against the mayor.

The lawsuit names 26 defendants, including several gaming board executives and employees, MTR Gaming and some of its executives, Ambrose, Erie businessman Nicholas C. Scott and one of his companies.

The lawsuit claims that Ambrose, in retaliation for Rubino's testimony, told a gaming board investigator that Rubino was connected to the Mafia but could not be arrested because the FBI was using him as an informant. Rubino states in the lawsuit that he's neither a Mafioso nor an FBI informant.

Ambrose and Doug Harbach, spokesman for the gaming board, said in separate interviews that they had not seen the lawsuit and declined comment.

Rubino worked with Arneault and MTR Gaming as a consultant when they developed plans for the Presque Isle Downs casino and racetrack in Erie. In 2006, the gaming board insisted the company disassociate itself from Rubino before it could obtain its license, according to the lawsuit.

In the ensuing five years, the board has repeatedly refused to explain its decision or hold a hearing, the lawsuit states. The ban cost Rubino more than $12 million he would have earned as royalties from the Presque Isle Downs contract, according to the lawsuit.

Arneault left MTR — which also operates Mountaineer Casino, Racetrack and Resort in West Virginia — in 2008, and his successors at the company used his close ties to Rubino in an attempt to block the renewal of his gambling license, the lawsuit claims.

Scott denied he or his company conspired with the gaming board employees. "The allegations are meritless," he said.

John W. Bittner, executive vice president and chief financial officer of MTR, declined comment.

Arneault and Rubino claim in the lawsuit that they learned about Ambrose's role in their troubles when Arneault's attorneys on Aug. 10 deposed a gaming board inspector during Arneault's $2 million successful battle to renew his gambling license.