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Casinos file suit to block new Vegas arena

Las VegasMGM Grand and Boyd Enterprises, behind the shield of Taxpayers for the Protection of Nevada Jobs, have filed suit against a citizens group seeking to build a new Las Vegas arena behind Harrah’s, funded with a 0.9 percent hike in the Strip’s sales tax — and there’s some merit to their arguments, if third parties can be believed.

The group opposes a new arena because it could steal business and compete with existing arenas at the MGM Grand and The Orleans. The arena group gathered signatures across the state to petition the state legislature to take up the issue in the 2011 session; if the legislature fails to take up the petitions, then it goes to voters.

The argument: the petitions should be thrown out because signatures were fraudulently obtained. Here’s the release from the group:


Allegations of Rampant Fraud and Misconduct in the Signature Gathering Effort

Carson City, Nevada (Dec. 15, 2010) – The Taxpayers for the Protection of Nevada Jobs today filed a lawsuit in First Judicial District Court alleging “rampant fraud and misconduct” in the statewide gathering of signatures for a ballot initiative that would raise taxes to pay for an arena that could only be built on or near the Las Vegas Strip.

The lawsuit seeks to have the signatures invalidated.

“The lawsuit details a campaign of misinformation and misconduct intended to deceive the public into signing a petition for a tax increase that would benefit a single private company,” said Scott Scherer, an attorney speaking on behalf of the Taxpayers for the Protection of Nevada Jobs. “We strongly believe that the signature gathering process was tainted and that the signatures should be considered invalid.”

The lawsuit details how circulators collecting signatures for the Initiative engaged in the pervasive use of fraudulent means to obtain signatures, including:

• Repeatedly engaging in the use of false advertising. The circulators would lie to potential signers about the details, effects and benefits of the Initiative in order to induce them to sign the petition;

• On separate occasions, circulators lied to potential signers about the location of the proposed arena if the Initiative was passed. Circulators on numerous occasions and in different locations in Northern Nevada told potential signers that the arena would be built in their respective city or county. This is a blatant lie, as the Initiative as written would, in all practicality, force the arena to be built on a specific site on the Las Vegas Strip owned by Caesars Entertainment, Inc. (the company formerly known as Harrah’s);

• Circulators completed information on petitions that is required by law to be completed by the person signing the petition. Circulators also filed affidavits falsely stating that they had personally circulated the petition document and obtained the signatures. The evidence proves otherwise.

The suit alleges that the Initiative is riddled with errors and violations of applicable law. It is tainted by pervasive fraud and misconduct. For these reasons, the Taxpayers for the Protection of Nevada Jobs believe the court should order the Secretary of State to declare the Initiative invalid and order its withdrawal from the agenda for the upcoming Legislative session.

Thing is, there may be legs to the lawsuit. According to this report in the University of Nevada-Reno newspaper, students there reported being mislead about the intent of the petition drive and were told the funding would be used to bring a hockey team to Reno — not to build a new arena in Las Vegas.

The stakes are pretty high. On the one hand, the entire Vegas Strip would probably benefit if a new arena were built behind Harrah’s: the addition of an NHL or NBA team — which surely would happen with a new arena — would bring tens of thousands of additional folks to the Strip during game nights. On the other hand, the MGM Grand could potentially lose some high-profile acts and boxing matches to a new arena, and the Orleans arena would possibly lose ECHL hockey and other dates as well. 

RELATED STORIES: Nevada Legislature to consider arena sales tax

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