Court Opinion

ID: 9894851
Source: CourtListenerOpinion
Date Created: 2023-11-03 14:10:24.576784+00
Date Added: 2024-06-11T09:10:51.801409
License: Public Domain

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SJC-13416

         ANTHONY GATTINERI   vs.   WYNN MA, LLC, & another.1

        Suffolk.    September 13, 2023. - November 3, 2023.

 Present:   Budd, C.J., Gaziano, Lowy, Cypher, Kafker, Wendlandt,
                           & Georges, JJ.

Gaming. License. Contract, Option, Performance and breach.
     Real Property, Option. Public Policy. Statute,
     Construction. Constitutional Law, Taking of property.
     Supreme Judicial Court, Certification of questions of law.

     Certification of questions of law to the Supreme Judicial
Court by the United States Court of Appeals for the First
Circuit.

     Kelley A. Jordan-Price (Michael J. Connolly & John A.
LeBlanc also present) for the plaintiff.
     Emily Kanstroom Musgrave (Samuel M. Starr & Catherine S.
Lombardo also present) for the defendants.
     Howard M. Cooper, Ian J. Pinta, & Christian G. Kiely, for
FBT Everett Realty, LLC, amicus curiae, submitted a brief.
     David S. Mackey, Melissa C. Allison, & Sean M. Grammel,
Special Assistant Attorneys General, for Massachusetts Gaming
Commission, amicus curiae, submitted a brief.

    1   Wynn Resorts, Limited.
                                                                    2

     KAFKER, J.   As part of their bid to win a casino license in

Massachusetts, defendants Wynn MA, LLC, and Wynn Resorts,

Limited (collectively, Wynn),2 entered into an option contract

with FBT Everett Realty, LLC (FBT), to purchase a parcel of land

in Everett and Boston (FBT parcel) for $75 million.   As Wynn's

casino license application proceeded, the Massachusetts Gaming

Commission (commission) discovered the possibility of concealed

ownership interests in FBT by a convicted felon with connections

to organized crime.   Extensive investigation by the commission

of FBT, however, did not resolve those concerns.   In response to

the commission's lingering concerns, and after further

negotiations, FBT and Wynn amended their option agreement and

lowered the purchase price for the FBT parcel to $35 million, a

figure that reflected the fair market value of the parcel if it

were not used as a casino.   The amended option agreement was

submitted to the commission, and as a condition of its approval

of the amendment, the commission imposed a price cap of $35

million on the sale of the FBT parcel.   The commission also

required that the three publicly known members of FBT certify

that they would be the "exclusive recipients" of the FBT parcel

sale proceeds.

     2 Defendant Wynn MA, LLC, is a wholly owned subsidiary of
codefendant Wynn Resorts, Limited.
                                                                   3

    Plaintiff Anthony Gattineri, a minority owner of FBT,

opposed the price reduction and refused to sign the certificate

as required by the commission, arguing that he deserved to be

paid his percentage of the price reduction.   Gattineri alleges

that at a meeting with Wynn vice-president Robert DeSalvio in

San Diego, California, the two men agreed that in exchange for

Gattineri signing the certificate, Wynn would "make Anthony

Gattineri whole" by paying him an additional nearly $19 million,

calculated as Gattineri's proportional share of the $40 million

price reduction on the FBT parcel.   This agreement was neither

committed to writing nor communicated to the commission.

Gattineri was also a person of particular interest to the

commission, as he not only was one of the three principals of

FBT but had also bought out the convicted felon's ownership

interest in FBT and still owed him money at the time of the

investigation.

    Gattineri eventually signed the certificate.    The

commission then later awarded Wynn a casino license.   However,

Wynn never paid Gattineri the additional $19 million he alleges

he was owed, so he sued Wynn in the United States District Court

for the District of Massachusetts.   Gattineri argues that Wynn

has committed a breach of the contract (San Diego agreement)

formed between Gattineri and Wynn that induced Gattineri to sign

the certificate.
                                                                       4

    A Federal District Court judge granted summary judgment for

the defendants on all counts, and Gattineri appealed to the

United States Court of Appeals for the First Circuit.    The First

Circuit, reasoning that the enforceability of the San Diego

agreement under Massachusetts law was potentially dispositive of

the case, certified the following questions to this court:

    1. "Is the San Diego Agreement unenforceable because it
    violates [§] 21 of the Gaming Act?"3

    2. "If not, is the San Diego Agreement unenforceable for
    reasons of public policy of ensuring public confidence in
    the integrity of the gaming licensing process and in the
    strict oversight of all gaming establishments through a
    rigorous regulatory scheme?"

Gattineri v. Wynn MA, LLC, 63 F.4th 71, 95 (1st Cir. 2023).      See

S.J.C. Rule 1:03, as appearing in 382 Mass. 700 (1981)

(requirements for certification).

    We conclude that the San Diego agreement is unenforceable

for reasons of public policy.   By its express terms, the

paramount public policy of the Expanded Gaming Act (gaming act),

G. L. c. 23K, is to protect the integrity and public confidence

in the casino gambling licensure process.   This public policy,

reflecting both the risks presented by large-scale gambling

operations and the recognized need for their strict regulation,

has been consistently emphasized in our gambling statutes and

our case law.   Consequently, an agreement, concealed from the

    3   G. L. c. 23K, § 21, inserted by St. 2011, c. 194, § 16.
                                                                         5

commission empowered to review and approve casino licenses and

inconsistent with the terms presented to, and approved by, the

commission to address its concerns about the possibility of

involvement of organized crime, is therefore unenforceable as a

violation of public policy.       Because we hold that the San Diego

agreement is unenforceable for reasons of public policy, we need

not reach the question whether it is separately unenforceable

under § 21 of the gaming act.4

       1.    Background.   a.   Facts.   We recite the facts as stated

by the certifying court, supplemented by undisputed facts in the

parties' appendices.       Because this case was decided on a motion

for summary judgment, we recite the facts "in the light most

favorable to the nonmoving party," here Gattineri. See

Dorchester Mut. Ins. Co. v. Miville, 491 Mass. 489, 492 (2023),

quoting Dorchester Mut. Ins. Co. v. Krusell, 485 Mass. 431, 435

(2020).

       Gattineri is a 46.69 percent minority nonmanaging member of

FBT.       The other principals of FBT are Paul Lohnes and Dustin

DeNunzio.      In 2009, FBT purchased the FBT parcel, located in

Everett and Boston, where the Encore Boston Harbor resort and

casino now stands.       In December 2012, Wynn entered into an

option agreement with FBT to purchase the parcel for $75

       We acknowledge the amicus briefs submitted by the
       4

Massachusetts Gaming Commission and by FBT Everett Realty, LLC.
                                                                     6

million.   The option agreement required FBT to remediate some of

the environmental contamination on the parcel.    FBT also agreed

that it and its members would "reasonably cooperate with [Wynn]

with respect to any information it reasonably requires to

complete the Casino Application and respond to any such

inquiries throughout the licensing process."    In January 2013,

Wynn filed an application with the commission for a Region A

Category 1 gaming license to operate a resort and casino in

Massachusetts.    As a part of the application process, the

commission's investigations and enforcement bureau (IEB) began

investigating Wynn and FBT to determine Wynn's suitability for a

gaming license.

    During the investigation, the IEB became concerned by the

possibility that Charles Lightbody, a convicted felon with ties

to organized crime, had hidden ownership interests in FBT.     The

basis for these suspicions were telephone calls recorded in

December of 2012 between Lightbody and an inmate in State prison

wherein Lightbody referenced ownership or control of the FBT

parcel and the need to conceal it from the commission.

Gattineri stated that he obtained Lightbody's 12.05 percent

membership interest in FBT via a memorandum of transfer and

promissory note for $1.7 million.    FBT manager Dustin DeNunzio

admitted to the IEB that he had altered the memorandum of

transfer and promissory note to create the impression that
                                                                   7

Lightbody divested his interest in FBT in August 2012, prior to

the December 2012 option agreement with Wynn.   Those documents,

however, were actually executed in July 2013, heightening the

IEB's concerns.

     The IEB concluded that Lightbody had held an ownership

interest in FBT for longer than had been disclosed by FBT, and

thus the IEB was concerned that he continued to be involved

without the commission's knowledge.   There was also evidence

that Gattineri had not fully paid the promissory note and

satisfied the terms of the memorandum of transfer, raising

questions about whether Lightbody retained some reversionary

interest.5   When the IEB investigation was near completion, IEB

director Karen Wells informed Wynn of the IEB's findings and

concerns regarding the FBT parcel sale.   Wells told Wynn that

how it proceeded regarding FBT "receiving a financial windfall

as a result of the gaming facility was something the IEB would

report on regarding [Wynn's] suitability [to hold a casino

license]."

     5 In a July 2013 interview with police, Gattineri stated
that he owed Lightbody "like, a million," and when asked whether
Lightbody still had an ownership interest in a portion of FBT,
he replied, "Well, if I don't pay him, he can take it away from
me." In June of 2014, before Gattineri signed the certificate
as required by the commission, he paid the money owed to
Lightbody and owned Lightbody's share of FBT outright.
                                                                   8

    In response to the concerns expressed by the IEB, Wynn

hired an appraiser to study the FBT parcel and determined that

the fair market value for the FBT parcel if it were not used for

a casino was approximately $35 million.   As the IEB

investigation was ongoing, Wynn and FBT were negotiating

environmental liabilities associated with the FBT parcel.

Following these negotiations, Wynn and FBT agreed to the ninth

amendment to the option agreement (ninth amendment), whereby the

purchase price for the FBT parcel would be reduced to $35

million and FBT's environmental liabilities would be capped at

$10 million.   Gattineri opposed the purchase price reduction,

but as minority owner of FBT, he was unable to stop the ninth

amendment's ratification.

    Wynn submitted the ninth amendment to the commission for

its review and approval, describing the agreement as the

"proposed resolution to concerns raised by the [IEB] . . . about

undisclosed interests in FBT."   In testimony before the

commission, Wynn general counsel Kim Sinatra stated that Wynn

had fashioned the ninth amendment as a response to "the

seriousness of the concerns expressed" by the IEB.     Wynn

represented that $35 million was the fair market value of the

FBT parcel assuming it would not be used for a casino, thus

obviating any concern about undisclosed interests in FBT

obtaining a casino premium from the sale of the FBT parcel.
                                                                     9

Sinatra told the commission that the price reduction had been

negotiated "to take away from the transaction . . . the enhanced

benefit, economic benefit[,] that casino usage would add to

[the] valuation of this property."

    The commission credited Wynn's dedication to addressing the

concerns about FBT brought to them by the IEB, characterizing

the ninth amendment as a "prompt and aggressive" attempt to

remedy IEB's concerns.   It further noted that the ninth

amendment was "a thought[ful], careful exhaustive, appraisal of

. . . what a fair market value would be for a noncasino use" of

the FBT parcel.   A commissioner also expressed his belief that

"none of the appreciation of [the FBT parcel] that came from the

sale" should "go[] to somebody who's been dishonest" with the

IEB or the commission.

    The commission then approved Wynn's purchase of the FBT

parcel after imposing two conditions on the parties.     First, it

required that Wynn pay no more than $35 million in exchange for

the FBT parcel, reflecting the value of the parcel without a

casino premium.   Second, the three members of FBT (Gattineri,

Lohnes, and DeNunzio) would be required to sign under oath

certificates stating that they would be the "exclusive

recipients of the proceeds" of the FBT parcel sale.    The

commission also directed the IEB to deliver its files to the
                                                                    10

United States Attorney, the Attorney General of Massachusetts,

and the district attorney for the Suffolk district.

     Lohnes and DeNunzio signed the certificates on December 23,

2013, but Gattineri refused to do so.     For several months,

Gattineri met with various Wynn representatives but refused to

sign the certificate, protesting that he would not sign unless

he was given his share of the $40 million price reduction.

     On June 14, 2014, Gattineri met with Wynn vice-president

Robert DeSalvio at the Westgate Hotel in San Diego.     Gattineri

alleges that at this meeting, he and DeSalvio agreed that if

Gattineri signed the certificate and Wynn subsequently obtained

a gaming license, Wynn would "make Anthony Gattineri whole."

According to Gattineri, "making [him] whole" meant paying him

around $19 million, calculated as his 46.69 percent share of the

$40 million price reduction on the FBT parcel.     A few hours

after his June 14 meeting with DeSalvio, Gattineri signed a

certificate stating that he would be the sole recipient of his

share of the FBT parcel purchase price.    Neither Wynn nor

Gattineri alerted the commission to the San Diego agreement.6

     6 Gattineri argues that the public, and thus the commission,
was on notice as to the existence of the San Diego agreement.
In support of this contention, Gattineri points to a July 13,
2014, Boston Globe article. The article's sixteenth paragraph
mentions that Gattineri signed the certificate to "preserv[e]
the possibility that he would be paid more than $16 million if
Wynn gets his casino." The parties disagree as to whether this
is a reference to Gattineri's share of the $35 million purchase
                                                                  11

Gattineri stated in a deposition that he asked DeSalvio to put

the San Diego agreement in writing and that DeSalvio refused to

do so "because of the gaming law."7

     On June 18, 2014, Wynn sent the commission a copy of the

certificate.   In September 2014, Wynn was granted a gaming

license by the commission and subsequently bought the FBT parcel

for $35 million.   Wynn did not pay Gattineri the $19 million

that he alleges he was due under the San Diego agreement.

     In October 2014, Gattineri was indicted in the Federal

District Court for alleged fraud in connection with FBT's

ownership of the FBT parcel and was arraigned in the Superior

Court on charges of impeding a gaming investigation, conspiracy,

and tampering with evidence.   In 2016, Gattineri was acquitted

price (which amounted to slightly over $16 million) or a very
oblique reference to the San Diego agreement (valued at roughly
$19 million). In either case, we disagree with Gattineri's
contention that one oblique line in a newspaper article
reasonably could support a rationale for finding that the San
Diego agreement is a public agreement.

     7 Because we interpret the facts in the light most favorable
to Gattineri, we assume for the purposes of this opinion that
the San Diego agreement took place in the manner Gattineri
alleges. We do not determine that Wynn and Gattineri actually
entered into the San Diego agreement, although we note that the
commission has the right and even the responsibility to
determine whether such an agreement was made, and the alleged
conduct may be subject to further investigation.
                                                                     12

of all Federal charges, and the Commonwealth thereafter entered

nolle prosequis with respect to the State charges.8

     b.   Procedural history.    In June 2018, Gattineri sued Wynn

in the United States District Court for the District of

Massachusetts, alleging breach of contract, common-law fraud,

and unfair or deceptive trade practices in violation of G. L.

c. 93A, § 11.   Arguing that Wynn had "fail[ed] to make him

whole," Gattineri sought almost $19 million in damages.       A

Federal District Court judge granted Wynn's motion for summary

judgment on all three counts, and Gattineri appealed.       On

appeal, the First Circuit determined that the ultimate legality

of the San Diego agreement was potentially dispositive of

Gattineri's suit.      Gattineri, 63 F.4th at 90.   Reasoning that

the legality of the San Diego agreement involves "important

questions of state law and public policy with significant

implications," the First Circuit certified questions for our

review.   Id. at 94.

     2.   Discussion.    a.   Public policy and the gaming act.

"The general rule of our law is freedom of contract . . . ."

Beacon Hill Civic Ass'n v. Ristorante Toscano, Inc., 422 Mass.

318, 320 (1996), quoting Smith v. The Ferncliff, 306 U.S. 444,

     8 Lightbody was also acquitted of the charges related to the
sale of the FBT parcel. United States v. DeNunzio, 450 F. Supp.
3d 86, 88 (D. Mass. 2020).
                                                                   13

450 (1939).   However, "it is 'universally accepted' that public

policy sometimes outweighs the interest in freedom of contract,

and in such cases the contract will not be enforced."    Feeney v.

Dell Inc., 454 Mass. 192, 199-200 (2009), citing Beacon Hill

Civic Ass'n, supra at 321.   "The grounds for a public policy

exception must be clear in the acts of the Legislature or the

decisions of this court."    Trustees of the Cambridge Point

Condominium Trust v. Cambridge Point, LLC, 478 Mass. 697, 705

(2018), quoting Miller v. Cotter, 448 Mass. 671, 683 (2007).

"'Public policy' in this context refers to a court's conviction,

grounded in legislation and precedent, that denying enforcement

of a contractual term is necessary to protect some aspect of the

public welfare."   Rawan v. Continental Cas. Co., 483 Mass. 654,

666 (2019), quoting Beacon Hill Civic Ass'n, supra.     With these

principles in mind, we consider whether the San Diego agreement

is unenforceable on public policy grounds.

    This court has long recognized that the legalization and

regulation of gambling are among the Legislature's core police

powers, given the risks associated with gambling operations.

Abdow v. Attorney Gen., 468 Mass. 478, 489-490 (2014).    See

Selectmen of Topsfield v. State Racing Comm'n, 324 Mass. 309,

315-316 (1949) (Legislature has authority to impose conditions

on gambling that it "deem[s] necessary in the public interest").

See also Commonwealth v. Wolbarst, 319 Mass. 291, 294 (1946)
                                                                  14

(explaining that "suppression of gambling lies within the domain

of the police power of the Commonwealth").   "[B]ecause of the

nature of the business[, gambling] can be abolished at any time

that the Legislature may deem proper for the safeguarding and

protection of the public welfare."   Carney v. Attorney Gen., 451

Mass. 803, 817 (2008), quoting Selectmen of Topsfield, supra at

315.   Where gambling has been legalized, the Legislature has

strictly regulated it, giving administrative agencies broad

powers to oversee its licensing and operation to protect the

public interest.   See G. L. c. 23K, § 1 (10) (providing that

"the power and authority granted to the commission shall be

construed as broadly as necessary" to implement and administer

gaming act).   See also Colella v. State Racing Comm'n, 360 Mass.

152, 159 (1971) (recognizing that because "inherent in any

[large] gambling operation" are "many perils, pitfalls,

temptations and traps for the unwary" as well as "occasions for

corruption for the participants," Legislature gave "very broad

powers" to State Racing Commission to address these "dangers").

We have also already recognized these specific concerns and

powers in this exact context in Revere v. Massachusetts Gaming

Comm'n, 476 Mass. 591, 597-598 (2017) (explaining broad

discretion afforded to commission and importance placed on

public confidence in integrity of gaming licensing process under

gaming act).
                                                                    15

     The text of the gaming act reflects this commitment to

strict regulation to promote the integrity, and reduce the

risks, of casino gambling.   As the Legislature expressly stated:

"ensuring public confidence in the integrity of the gaming

licensing process and in the strict oversight of all gaming

establishments through a rigorous regulatory scheme is the

paramount policy objective of [the gaming act]" (emphasis

added).   G. L. c. 23K, § 1 (1).   Thus, "the power and authority

granted to the commission shall be construed as broadly as

necessary for the implementation, administration and enforcement

of [the gaming act]."   G. L. c. 23K, § 1 (10).   The gaming act

pursues this objective by, inter alia, requiring comprehensive

investigation and regulation of gaming industry participants,

ranging from commission members and employees to casino license

applicants, licensees, and their business associates.   See G. L.

c. 23K, §§ 1 (1), 3 (a), (l), 6 (b), 12 (a).9

     9 The focus on integrity and public confidence begins with
the selection of the commissioners themselves. "Prior to
appointment to the commission, a background investigation shall
be conducted into the financial stability, integrity, and
responsibility of a candidate, including [his or her] reputation
for good character, honesty and integrity." G. L. c. 23K,
§ 3 (a). See also G. L. c. 23K, § 3 (l) (requiring background
checks for all commission employees and stating that employees
are generally disqualified by past convictions of felonies or
crimes involving dishonesty). Although commission members and
employees are subject to the general code of conduct for public
employees, the commission is required to "establish a code of
ethics . . . more restrictive than" that imposed on other
government employees. G. L. c. 23K, § 3 (m). The commission's
                                                                    16

    The commission is directed to "assure . . . that there

shall be no material involvement directly or indirectly with

. . . a gaming operation or the ownership thereof, by

unqualified, disqualified or unsuitable persons or by persons

whose operations are conducted in a manner not conforming with"

the gaming act.   G. L. c. 23K, § 4 (9).   Importantly, the

commission may "require a person who has a business association

of any kind with a gaming licensee or applicant to be qualified

for licensure under [the gaming act]."     G. L. c. 23K, § 4(11).

Because Gattineri, as one of the owners of the FBT parcel, was

"a person who ha[d] a business association . . . with a gaming

licensee or applicant" (that is, Wynn), the commission had, at a

minimum, the power to review Gattineri's involvement in the

parcel as part of Wynn's qualifications for licensure.     Id.   As

explained in more detail infra, Gattineri was also "a business

association" of particular concern.   He had purchased the

interest in FBT of a convicted felon with possible connections

to organized crime, and there were multiple unanswered questions

related to that purchase.   The gaming act also provides for an

in-depth investigation of the qualifications and suitability of

code of ethics prohibits "the receipt of gifts by commissioners
and employees from any gaming licensee, applicant," or his or
her business associates, and "provid[es] for recusal of a
commissioner . . . due to a potential conflict of interest."
Id.
                                                                    17

licensees and their associates to ensure their integrity.     The

gaming act created the IEB, designated as a "law enforcement

agency" and empowered it with "such law enforcement powers as

necessary to effectuate the purposes" of the gaming act.     G. L.

c. 23K, § 6 (b).   Once the commission has received an

application for a gaming license, the IEB is authorized to

investigate "without limitation . . . the integrity, honesty,

good character and reputation of the applicant" (emphasis

added).   G. L. c. 23K, § 12 (a) (1).   Applicants seeking gaming

vendor licensure can be required to produce records including

    "a criminal and arrest record; . . . any civil judgments
    obtained against the person pertaining to antitrust or
    security regulation; . . . an independent audit report of
    all financial activities and interests including, but not
    limited to, the disclosure of all contributions, donations,
    loans, or any other financial transaction to or from a
    gaming entity or operator in the past [five] years; and
    . . . clear and convincing evidence of financial stability
    . . . . The commission may require such other information
    as it considers appropriate including, but not limited to,
    information related to the financial integrity of the
    applicant . . . ."

G. L. c. 23K, § 31 (b).   The commission may further require, "at

its sole discretion, . . . [investigation of] other persons or

companies that have a business association of any kind with the

applicant."   205 Code Mass. Regs. § 116.02(2) (2012).

    The affirmative obligations of those whose qualification

and suitability are being evaluated are also set out in the

gaming act.   Such persons "have the continuing duty to provide
                                                                     18

any assistance or information required by the commission and to

cooperate in any inquiry or investigation conducted by the

commission."     G. L. c. 23K, § 13 (b).   They may not "willfully

withhold information from, or knowingly give false or misleading

information to, the commission."    G. L. c. 23K, § 13 (c).     Lack

of transparency by an applicant, licensee, or other person

required to be qualified for licensure can result in the denial

of an application or the revocation of a license already

granted.   Id.

    All these requirements are designed to develop a thorough

understanding of the applicants and their associates to ensure

the integrity of the gambling license and operation.      The

concealing of information relevant to this inquiry is strictly

prohibited.

    Given the well-defined public policy concerns set out in

the gaming act and the case law, we turn to the licensing

process and the specific contracts at issue.

    b.     Core regulatory concern requiring full investigation

and disclosure of the details of the FBT parcel sale.      In the

instant case, the commission was confronted with very troubling

evidence indicating that Lightbody, a convicted felon with

possible connections to organized crime, might have an

undisclosed ownership interest in the parcel of land that would

be a part of a casino license application.     That interest had
                                                                     19

also been purchased by Gattineri pursuant to a promissory note

and memorandum of understanding.    The details of that purchase

were also suspicious, as documents had been backdated.      All of

this made the details of the FBT parcel sale to Wynn, including

Gattineri's interest in it, a matter of significant regulatory

concern, requiring full investigation and disclosure.

    Gattineri's interest in the property and the price he would

receive for it were therefore well within the regulatory powers

of the commission.    The commission's follow-up investigation

also made its lingering concerns regarding Lightbody and

Gattineri clear to all of those involved.    As a result, any

additional contract involving Gattineri's compensation should

have been presented to the commission by Wynn or Gattineri

himself.   Wynn and Gattineri's statutory obligations to fully

disclose pertinent information and to not mislead the commission

required such presentation particularly because of the concerns

that Lightbody might still be involved, and because Gattineri

was the one who transacted with him.    See G. L. c. 23K,

§ 13 (b), (c).    Consequently, the enforcement of any contracts

concealed from the commission and compensating Gattineri for his

interest in the property would be a violation of public policy.

    c.     A secret contract with terms inconsistent with those

disclosed to the public.    Not only was the alleged San Diego

agreement concealed from the commission, but it was also
                                                                  20

inconsistent with the publicly disclosed terms and conditions

upon which the sale of the FBT property had been approved.    This

provides an additional reason for rendering the San Diego

agreement unenforceable.

    The commission had approved the sale of the FBT parcel to

Wynn with two specific conditions designed to address its

concerns about undisclosed interests with connections to

organized crime.   First, it sought certificates from FBT members

that confirmed their ownership stake in FBT and that they would

be the only recipients of the FBT parcel sale proceeds.     Second,

it required that "the sale price" of the FBT parcel be "no more

[than] $35 million" to ensure that the purchase of the parcel

would not reflect a casino premium.   The commission considered

the price reduction necessary to promote public confidence in

the integrity of the deal, as the combination of the IEB's

investigation, the certificates, the capped price, and the

turning over of files to the United States Attorney, the

Attorney General of Massachusetts, and the district attorney for

the Suffolk district for further investigation demonstrated the

commission's commitment to preventing any persons with

connections to organized crime from profiting from the awarding

of the license.

    In response, Gattineri refused to sign the certificate.

Instead, he would only do so if he received extra compensation.
                                                                    21

That compensation, he claims, was to be provided in the San

Diego agreement, a contract for an additional $19 million that

was concealed from the commission.

    Secret deals in violation of the public terms and

conditions required for gaming licensure are unenforceable

violations of public policy.    They place in grave doubt the

integrity of the public process for awarding the license, and

thereby defeat the public's confidence in that process.     See

G. L. c. 23K § 1 (1); Abdow, 468 Mass. at 489-490; Colella, 360

Mass. at 158.     As a result, they are unenforceable.

    As alleged by Gattineri, he and Wynn's representative

negotiated a secret oral agreement for additional compensation

beyond the $35 million cap required as a condition for approval

of the license.    It was also to be paid to Gattineri, the person

who had purchased an additional interest in FBT from Lightbody,

the convicted felon with ties to organized crime who was

recorded claiming to still have an interest in the FBT parcel,

thereby raising concerns that such additional undisclosed

compensation might end up in his hands.     It is hard to imagine

contractual conditions more likely to undermine the public's

confidence in the licensing process.     According to Gattineri,

the deal was negotiated in private, done orally and not in

writing, and deliberately concealed from the commission.

Enforcement of such a secret agreement, contradicting the public
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terms of approval, constitutes a clear violation of public

policy.

       d.   The unusual nature of the price condition, the

commission's authority, and the legality of the response to the

condition.    Finally, we address the regulatory taking issue left

open by our discussion of the ninth amendment in FBT Everett

Realty, LLC v. Massachusetts Gaming Comm'n, 489 Mass. 702

(2022).

       Referencing that decision, Gattineri argues that the San

Diego agreement does not violate public policy because the

commission exceeded its authority in requiring a reduction in

the purchase price of the FBT parcel.     See id. at 716.    In that

case, we reversed the entry of summary judgment in favor of the

commission on FBT's regulatory taking claim, on the grounds that

the motion judge did not apply the correct legal standard for

regulatory takings and that the $35 million cap constituted a

"highly unusual" regulatory decision even though the commission

had "broad discretion in addressing its concerns about potential

concealed, criminal ownership interests in FBT."     Id. at 714,

715.    In particular, we questioned whether the cap may have

compelled the transfer of the value of the property from one

group of private parties, the FBT principals, to another, Wynn.

Id. at 717.    We emphasized in that case, as we do here, however,
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that these facts remain disputed and were not resolved by this

court in FBT Everett Realty, LLC.     See id.

    But even if we were to assume that the commission somehow

exceeded its authority and effectuated a taking against FBT by

limiting the FBT parcel purchase price to $35 million, the

proper course of action would have been to seek compensation

from the commission, as FBT has done in the lawsuit it brought

against the commission.    See id. at 707-708 (discussing FBT's

lawsuit).   The solution to administrative overreach is a public

process challenging such overreach, not secret deals.     As a

result of FBT's lawsuit, the public will be apprised of the

commission's actions and whether those actions constituted an

unlawful taking.   See id. at 717.    By contrast, Gattineri

attempted to evade the commission's publicly declared

requirements for a gaming license by enacting a secret side deal

inconsistent with those requirements.     Such a secret side deal

is an unenforceable contract in violation of public policy

regardless of whether the commission itself exceeded its

authority in conditioning the license on a $35 million cap.

    3.     Conclusion.   We answer the second certified question as

follows.    An agreement, concealed from the commission empowered

to review and approve casino licenses, and inconsistent with the

terms presented to, and approved by, the commission to address

its concerns about the possible involvement of organized crime,
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is unenforceable as a violation of public policy.    Because we

hold that the San Diego agreement is unenforceable for public

policy reasons, we need not and do not answer the first

question, regarding whether it also violates § 21 of the gaming

act.

       The Reporter of Decisions is directed to furnish attested

copies of this opinion to the clerk of this court.    The clerk in

turn will transmit one copy, under the seal of the court, to the

clerk of the United States Court of Appeals for the First

Circuit, as the answer to the question certified, and will also

transmit a copy to each party.