MGM Resorts-backed group files suit to block Strip arena

Associated Press

Published Wednesday, Dec. 15, 2010 | 5:10 p.m.

Updated Wednesday, Dec. 15, 2010 | 5:47 p.m.

A group backed by MGM Resorts filed a lawsuit Wednesday alleging "rampant fraud" in the collection of signatures for an initiative to build a Las Vegas Strip sports arena on land owned by a rival casino company.

The measure would authorize a special taxing district in the Strip area, where an additional sales tax of 0.9 percent would be imposed to fund construction of the $448 million arena on land donated by Caesars Entertainment, formerly known as Harrah's Entertainment.

Backers gathered more than 157,000 signatures in Nevada's three congressional districts to send the proposal to the 2011 Legislature. If lawmakers reject it or fail to act within 40 days, it would automatically go to voters in 2012.

Wednesday's suit was filed by Taxpayers for the Protection of Nevada Jobs, a group that includes MGM and Boyd Gaming Corp., which have opposed the measure since its inception because of concerns it would take business away from their own venues.

"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," the group's lawyer, Scott Scherer, said in a statement.

"We strongly believe that the signature gathering process was tainted and that the signatures should be considered invalid."

Among other things, the suit claims signature gatherers lied to potential signers to "induce" them to sign the petition, in some instances lying about where the stadium would be built.

"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, which is a blatant lie because if the initiative passes the arena can only be built in Clark County and only in a very specific part of Clark County," the suit said.

"The initiative is riddled and errors and violations of applicable law," it said. "It is tainted by pervasive fraud and misconduct."

The lawsuit seeks to have the signatures invalidated and the initiative withdrawn from the agenda for the upcoming legislative agenda, or at least a "full and proper verification of all the signatures" by the secretary of state.

Backers of the project, including former Clark County Commissioner Bruce Woodbury, have said the arena could help lure a professional sports team to Las Vegas and secure it as home turf for other large special events, such as the National Finals Rodeo, now held at the Thomas & Mack Center at the University of Nevada, Las Vegas.

Woodbury said an arena would not only benefit Las Vegas, but the entire state. Las Vegas, as Nevada's population and tourism hub, is the state's economic engine.

Proponents argue that while Las Vegas venues may have enough seating capacity, they are aging and lack high-end amenities - suites, luxury boxes and practice facilities - that sports teams and special event promoters want and a new arena will accommodate.