Maryland Live! Sues MGM Resorts Over Customer Poaching
The MGM National Harbor casino has yet to open, and already its rivalry with in-state competitor Maryland Live! has become heated. According to The Baltimore Sun, the four-year old Maryland Live!, the state’s largest casino, has filed a lawsuit against MGM Resorts International, alleging that MGM National Harbor hired former Maryland Live! casino hosts, knowing those hosts were bringing with them contact information for some of their former employer’s high-roller customers.
In the lawsuit, which was filed in the U.S. District Court in Baltimore, Maryland Live! says that the ex-employees “misappropriated Maryland Live’s trade secrets without authorization and are using them to advance their interests to the detriment of Maryland Live.”
Maryland Live!, located in Anne Arundel County, just southwest of the Baltimore/Washington International Thurgood Marshall Airport (I feel like “International” should come after “Thurgood Marshall,” but I digress), believes that those in charge of hiring at MGM National Harbor knew full well that their new hires had the information about the high rollers when they were brought on board.
MGM National Harbor Rendering
Image credit: mgmnationalharbor.com
MGM “aided and abetted this whole scheme, hiring the individual defendants with knowledge that they have misappropriated trade secrets and are subject to No Hire/Non-Compete agreements,” the lawsuit alleges.
The “whales” that MGM National Harbor is allegedly trying to poach rank in the Black and Chairman’s Rewards Card levels at Maryland Live!, the two highest loyalty tiers the casino’s rewards program offers. In order to reach the Black level, gamblers must earn from 500,000 to 1,999,999 “tier” points or log 5,000 poker hours in a calendar year. To hit the Chairman’s level, a player must earn 2,000,000 points.
To give an idea of how much one actually has to gamble to reach those points plateaus, players earn one point for every dollar they put into a slot machine, for every two dollars they put into a video poker machine, and for every four dollars they put into an electronic table game. Those who prefer live table games like blackjack have their play monitored and earn points based on games played, how much they wager, and how long they play.
All told, Black and Chairman’s level players risk a lot of money. And while they receive loads of freebies and perks from the casino, they also likely make a sizable number of non-gaming purchases, as well. It is no mystery why a competing casino would want to woo these players.
And it’s no wonder why Maryland Live! is upset that there is a chance their high rollers could give MGM National Harbor a try when the casino opens, especially if Maryland Live! believes that the way MGM attracted them wasn’t kosher.
Maryland Live! alleges that around the time the hosts were fired for not signing a revised non-compete and confidentiality agreement, it was discovered that two of them had downloaded “hundreds” of files “unlawfully.”
MGM, for its part, thinks Maryland Live! is out of line. In a statement, the company said:
Although it is our normal practice to not comment on pending litigation, this lawsuit amounts to nothing more than a thinly disguised attempt to stifle the competition Maryland Live expects from MGM’s National Harbor resort and to try to tarnish MGM’s reputation in the marketplace.
In addition, Maryland Live is resorting to threatening its current and former employees with unenforceable non-compete provisions in hopes of preventing people from working in other states regardless of whether their new employment would compete with Maryland Live.
The allegations in Maryland Live’s lawsuit against MGM National Harbor are baseless, and MGM will vigorously defend against Maryland Live’s lawsuit.
The non-compete agreements referenced prevent former employees from working for MGM National Harbor or any other casino within 75 miles for a year after their employment ends with Maryland Live!
MGM National Harbor, scheduled to open in December, is located about ten miles south of Washington, D.C. on the Potomac River, on the Virginia border. It is less than 40 miles from Maryland Live! The location is a strategic one, as it should be able to attract plenty of gamblers from Virginia, which has no casinos, and is convenient enough to Washington to draw tourists and business travelers.
The three employees targeted in the lawsuit, in addition to MGM, were called “executive hosts” at Maryland Live!, tasked with taking care of the needs of the casino’s whales. MGM claims that their new employment does not violate their non-competes, as the employees will be working for a subsidiary called Destron, located more than 75 miles away from Maryland Live!
Maryland Live! calls bullshit on this in the lawsuit, though, saying that Destron “is conveniently located close to MGM National Harbor, and Maryland Live!’s primary customer base. To be sure, Defendants cannot set up phony offices to evade noncompete agreements.”
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