Borgata Lawsuit Accuses Rival Ocean Casino Of Poaching Key Executives

Two Atlantic City casinos are now in a legal skirmish over whether one improperly raided the other's marketing department.
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It took eight years, but a settlement in the epic $10 million Phil Ivey vs. Borgata mini-baccarat “edge sorting” saga appears to have been finalized last week.

But just a day later, Borgata filed its own lawsuit rife with melodrama, accusing rival Atlantic City’s Ocean Casino Resort of “raiding Borgata’s casino marketing department” as a means of stealing some of Borgata’s best customers.

William Callahan, Borgata’s vice president of relationship marketing, and Kelly Ashman Burke, Borgata’s former executive director of marketing — who was said to be “in a position which gave her unique access to intimate knowledge of Borgata’s marketing strategies and customer loyalty databases” — are the main targets as defendants named in the suit along with Ocean Casino Resort.

Burke’s contract with Borgata just ended in July, and the casino asserted that her joining Ocean is “in violation of her post-employment non-competition and other restrictions.”

As for Callahan, Borgata attorneys allege that he “never returned his Borgata company phone and all of the trade secrets stored therein; even now, he and his counsel have refused to return it.

“And, in a transparent ruse to circumvent his non-competition obligations, Ocean gave the career casino marketing executive the title of ‘SVP of Hotel Operations’ despite the fact that during his eighteen years of work at Borgata, he had never overseen hotel operations, never overseen housekeeping, never overseen front desk, bell desk, or janitorial services (all of which are core hotel functions).”

The extent of the alleged poaching

Four other casino executives also have left Borgata for Ocean this month, according to the suit filed in federal district court in Nevada, which stated they took positions involving “misuse of trade secrets and other confidential and proprietary information.” The moves, according to the suit, demonstrate “Ocean’s intention to cripple Borgata’s casino operation and misappropriate both Borgata’s business relationships and its trade secrets and other confidential and proprietary information.”

Callahan was hired by Borgata in 2002, just ahead of its grand opening as the first “Las Vegas-style casino” in Atlantic City.

“Callahan personally oversaw Borgata’s highest-level patrons, including those who spend or gamble $1.5 million to $4 million per visit to Borgata and are collectively responsible for approximately $25 million in revenue to Borgata per year,” per the lawsuit.

If you’re wondering what sort of perks come with such spending:

“Callahan used Borgata corporate resources to develop and enrich close personal relationships with these patrons, including making the Company’s corporate jet available to them, attending weddings, providing luxury accommodations, attending football and basketball games, and other social activities.

“Callahan also possessed detailed knowledge of the these players’ particular requirements and practices and had knowledge of how Borgata extended credit to these individuals, when and in what amounts Borgata might discount large losses, the extent to which Borgata would negotiate and modify certain rules that might affect the outcome of game play, the assignment of players to Borgata’s exclusive ‘Residence’ hotel rooms, which are exclusive suites not available for cash reservations, and players’ amenity and food and beverage preferences, and other information about the players and their tendencies that Borgata relied upon to provide it with a competitive advantage in retaining these players during their visits to Atlantic City.”

Smartphone at center of the drama

And what about that phone?

“On information and belief — because Callahan has thus far refused to return the phone — this phone contains the personal cell phone numbers for these players and patrons, as well as text message conversations and other trade secret information about high value players.”

While Ocean is not always recognized as a major player in Atlantic City due to its being a 2018 revival of the ill-fated multi-billion dollar Revel casino which opened in 2012 and ignominiously closed its debt-ridden doors in 2014, Borgata’s lawsuit reads differently.

“Ocean is indisputably Borgata’s direct and primary competitor for high-level casino customers in Atlantic City,” the lawsuit states.

Regarding Burke, the suit adds, “Immediately after her employment with Borgata ended on or about July 18, 2020, Burke began employment with Ocean. Burke acknowledged the applicability of the non-competition provision in post-employment discussions.

“Nevertheless, Burke accepted her position at Ocean in violation of those restrictions, and upon information and belief, Burke performs the same job functions at Ocean that she performed as Executive Director of Marketing for Borgata.”

“Ocean’s egregious and willful conduct supports an award of punitive damages in this matter,” Borgata’s attorneys conclude.

 

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