MGM Borgata drops trade secrets lawsuit against rival Atlantic City Ocean Casino
Publication Date: May 8, 2021, 04: 47 hrs.
Last updated: May 8, 2021, 04: 47 h.
A lawsuit brought by Borgata and its parent company, MGM Resorts International, against its Atlantic City-based competitor, Ocean Casino Resort, has been settled, according to a statement released this week by MGM. The legal action alleged that Ocean hired Borgata's marketing staff and gained access to its trade secrets.
Borgata filed the lawsuit in federal court last August. In April 24, the two parties "amicably resolved their disputes in a global settlement, the terms of which will be largely satisfied within ... 120 ... days, " according to the court document.
"The matter between Borgata and Ocean Casino has been amicably resolved," says a statement MGM released on Casino.org on Friday.
As part of the resolution, Ocean agreed to abide by Borgata's restrictive covenants, including a non-compete, non-solicitation and confidentiality provision designed to protect Borgata's trade secrets. "
The trial judge will still be able to enforce the agreement and resolve any disputes.
Last October, William Callahan, Borgata's top marketing executive, who was away at the nearby Ocean Casino, was ordered to turn over his cell phone for a forensic exam. Callahan had previously returned a business phone he received from Borgata.
The inspection looked for Borgata trade secrets or proprietary VIP player data that could be used at a rival casino. Press.
Callahan was also ordered to turn over forensic copies of two phones, personal computers or other devices linked to cloud accounts. He also turned over login credentials for cloud programs that may contain information related to trade secrets, the AP said.
Non-compete agreement signed
Callahan and other Borgata employees are subject to a one-year non-compete agreement they agreed to while working for the games property.
Kelly Ashman Burke, another marketing specialist who left Borgata for Ocean Casino, is not allowed to work in Ocean Casino's marketing department last year. Burke was ordered to destroy any copy of Borgata's marketing strategy that she or Ocean Casino may have, AP adds.
Both Callahan and Burke had key marketing positions at Borgata. Burke was Borgata's Executive Director of Marketing and Callahan was Vice President of Relationship Marketing.
Former employees knew VIP preferences
Burke and Callahan have proprietary knowledge of how MGM and Borgata handle high rollers. They are also likely familiar with each VIP player's gambling preferences, food and beverage habits, and the rewards provided to them by the Borgata.
Under the prior lawsuits, Callahan and Burke were further prohibited from contacting or soliciting Borgata's current customers. They also could not disclose any of Borgata's trade secrets.