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Restaurant, off-Strip casino in legal fight over failed sportsbook concept

Updated June 5, 2024 - 7:31 pm

Litigation between a former tenant at Virgin Hotels shows a lengthy battle over who is responsible for costs associated with a failed restaurant-sportsbook concept.

JC Hospitality, one of the operating partners behind Virgin, and Money, Baby!, a former restaurant at the off-Strip hotel-casino, have been trading complaints in court since July 2022 after the casino operators filed an eviction and breach of lease action against the restaurant.

Money, Baby! was initially billed as a first-of-its-kind concept by the hospitality firm Clive Collective that housed the property’s sportsbook in a nightlife atmosphere when the former Hard Rock Hotel reopened in 2021 under new ownership. But the property opened without a sportsbook license and Money, Baby! closed in late June 2022. (It took almost two years for United Kingdom-based Betfred Group Ltd. to get approved by state regulators.)

In a business court case filed in the Eighth Judicial District Court, JC Hospitality, acting as the landlord, sued because the restaurant had breached its contract for failing to pay a roughly $845,000 construction lien. When the property sent Money, Baby! a notice of default, the restaurant shuttered, further breaking the terms of the lease, according to JC Hospitality’s July 2022 complaint.

Lawyers representing the property point out at the time of closure, restaurant operators failed to return $150,000 in event deposits for events no longer being put on at that time, according to filings. A separate pending lawsuit against the restaurant alleges it failed to return a $70,000 event deposit to the Dermatology Education Foundation after its sudden closure.

But the lawyers for Money, Baby! argue the sudden closure and the financial repercussions were the result of Virgin operating partners’ actions. In their counterclaim, they allege executives with JC Hospitality told the general contractor that it would “pay for all necessary overage” to get the job done by the summer 2021 opening, without the restaurant operators present.

Adam Shelton, a legal consultant for the team behind Money, Baby!, said the nexus of its cross-complaint is the failed sportsbook concept within the restaurant. He said the group’s damages exceed $400 million, including loss of investment, loss of capital raised, loss of earnings, damages from the construction liens and other estimates.

“It was clear that the C-suite of JC Hospitality led the Clive (Collective) group to raise capital for the purposes of placing the sportsbook inside, in a ‘first-of-its-kind’ concept,” Shelton said. “Thereafter, through a series of really unfortunate mishaps, because they couldn’t follow through on all the promises they made to this group, they damaged this group to the tune of over $400 million.”

Representatives for the property and its operators declined to comment.

The court will hear motions to dismiss the case from new parties, including Juniper Capital Partners, subsidiaries and former executives with JC Hospitality and the capital firms Richard “Boz” Bosworth, Chris Cosenza and Gary Scott, on July 24, according to the docket.

Contact McKenna Ross at mross@reviewjournal.com. Follow @mckenna_ross_ on X.

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