Mixed martial arts promoters accused of monopolizing Pa. casino markets

A Philadelphia-based mixed martial arts organizer says that competitors have illegally muscled him out of the opportunity to host fights at three major regional casinos, according to an antitrust lawsuit filed at the U.S. District Court for the Eastern District of Pennsylvania.

Ryan Kerwin, owner of Xtreme Caged Combat, alleges that David Feldman, who runs Xtreme Fight Events, and Rob Haydak, owner of Cage Fury Fighting Championships (CFFC), conspired together to form exclusive promotion deals with Harrah's Casino in Chester County, Valley Forge Casino and Resort and Sands Casino in Bethlehem, gaining 100 percent market share with the only casinos in the Philadelphia region that host MMA events.

The plaintiff seeks $150,000 in compensatory and punitive damages against Feldman and Haydak, plus the owners and managers of Harrah's and Valley Forge Casino, for monopolizing the MMA casino market by denying access to competitors and driving up ticket prices. He also wants injunctive relief that would allow him to participate in the lucrative casino market.

According to the complaint, Feldman made his first casino deal in 2011 when he entered into a non-compete agreement with Harrah's. The claim says the the terms granted Feldman exclusive rights to organize and exhibit mixed martial arts fights at the casino, which provided him with a free venue, chairs and tables, plus $10,000 cash. No other fight promoters were permitted to organize a fight at the casino during the term of the contract.

However, in 2012 Feldman entered into a similar agreement with Sands Casino in Bethlehem. In order to avoid conflicting with the non-compete contract with Harrah's, Feldman promoted the fights under the company name "PA Caged Combat." The complaint says that Feldman eventually convinced the Harrah's owners that the Sands Casino was far enough from its venue that it would not directly compete for customers.

Kerwin approached the Valley Forge Casino Resort in 2012 about promoting MMA fights and was told he would need to rent out the venue at $10,000 per event. Kerwin declined, but Feldman allegedly used his connection to secure a deal that was once again similar to the Harrah's arrangement, free venue, tables and chairs plus a $10,000 payment from the casino.

This time, however, Valley Forge Casino's location conflicted with Harrah's. Feldman managed to work out a deal with Haydak, who has exclusive fight rights at the Borgota Casino in Atlantic City, N.J. Haydak agreed to promote fights for Feldman at Valley Forge under the CFFC brand and split the profits.

The complaint says that the two partners had a falling out in 2013 when Haydak refused to pay Feldman after the second fight, saying the contract was under Haydak's name. The feud lasted more than a year, with Feldman managing to get Haydak kicked out of Valley Forge when the contract was up, the suit says.

Still unable to manage fights with the Harrah's non-compete agreement, Feldman reached out to Kerwin and proposed a deal that would allow Kerwin to promote fights under the Xtreme Caged Combat name in exchange for $5,000 per fight. Before the deal could close, however, Feldman and Haydak made amends and formed a horizontal merger under the CFFC banner and successfully cornered the market, the suit says.

"CFFC now has exclusive, non-compete deals that prohibit any other MMA promotion in
their market from being able to do an event at Valley Forge Casino Resort in King of
Prussia, Pa., Harrah's Casino in Chester, Pa., Sands Casino in Bethlehem, Pa. and Borgata Casino in Atlantic City, N.J.," the complaint says.

Kerwin says that his current venue, the National Guard Armory in Northeast Philadelphia, costs him approximately $4,000 in rent, cleanup and insurance fees. The lucrative casino deals that include free venue access and $10,000 cash payouts give his competitors a $14,000 edge in the local MMA market, not to mention stronger marketing and promotional power inherent with a casino venue.

As a result, Kerwin says that he has also been muscled out of competing for contracts with up-and-coming MMA stars that would attract more fight fans.

The alleged monopoly also gives CFFC more leeway to charge higher ticket prices. The plaintiff says that tickets for his fights are $42 for general admission and $50 for front row seats.

By comparison, a ticket to a CFFC fight have gone as high as $55 for general admission and $175 for cageside seating. Kerwin says those prices will continue to climb as the defendants continue to dominate the market.

The plaintiff has indicated in court filings that he will represent himself in the civil action.

The federal case ID number is 2:14-cv-05159-LS.