A lawsuit was filed this week against Delaware North, Suffolk Off-Track Betting, claiming the company is overcharging millions for rent, construction and other expenses, while managing their Jake’s 58 Casino in Islandia. Suffolk OTB is the overseer of the venue while Delaware North is in charge of the managing of the property and are the owner of the hotel where the casino is located.
In the suit filed on Monday, Suffolk OTB claims that Delaware North is charging too much so that they can make money. According to Jon Schneider, a spokesman for Suffolk OTB, the marketing budget was drained by Delaware North to be able to comp hotel rooms they could not fill, which gave the company millions in revenues. That money should instead go back to OTB and then into the county.
In the complaint, it stays that the secret business plan of Delaware North was to charge costs to Suffolk OTB’s Jake’s 58 Casino so that the Jake’s 58 Hotel & Restaurant could make money. According to Schneider, millions of dollars in Islandia hotel rooms are being given away.
Denying the Claims:
Delaware North has commented since the lawsuit filing, denying the claims by Suffolk OTB. The operator says they have done nothing wrong and that Suffolk OTB is ‘mired in bankruptcy’ even though Jake’s 58 has been successful. According to Delaware North, under their management, the property has continued to out-perform financial projections which has resulted in higher returns than anticipated.
In the filing, Suffolk OTB is seeking $5 million in damages.