Update: Miami Beach Police and the Miami-Dade County State Attorney's Office have opened a fraud investigation into World OutGames, according to a press release the city sent out late Friday evening.

"Due to the potential misappropriation of funds, the Miami Beach Police Department and the State Attorney’s Office have conferred and are jointly opening a fraud investigation," City Spokesperson Melissa Berthier announced.

Original Post

In a nation where literally zero of the thousands of athletes currently playing in the big four professional sports — football, basketball, baseball, and ice hockey — are openly gay, the fact that Miami Beach was hosting the 2017 World OutGames, billed as the Olympics for LGBTQ athletes, was a huge societal step forward.

But one day before the event was set to take place, Miami Beach City Manager Jimmy Morales sent the City Commission a letter warning that the company running the games appeared to be in deep financial trouble. And this morning, most of the events were abruptly canceled, mere hours before the games were set to begin — upsetting athletes who traveled here to compete, and costing the city a minimum of $200,000 in wasted advertising money.

That $200,000 fee doesn't even include the time city employees spent coordinating the events, finding athletic venues, orchestrating fundraisers, and paying for added police services to cover the event, as well as permitting fees the city either waived or hasn't yet received for the event.

"It is with deep regret that due to financial burdens, World OutGames must cancel opening and closing ceremonies and sports programming with the exception of aquatics, country western dance, and soccer," the games announced in a press release this morning. "The Human Rights Conference and cultural programs will continue as planned. We thank everyone who has supported the effort and apologize to those who will be impacted by this difficult decision."

Several teams had already flown to Miami Beach from other countries in order to attend tonight's events. Miami Herald reporter Steve Rothaus posted video of the 30-person Mexican OutGames team finding out their athletic events had been canceled — after they'd already landed in South Florida. One Mexican teammate said they'd each spent 6,000 pesos (about $325) to fly here, and had booked hotel rooms.

Other athletes and LGBTQ community members raged against the OutGames organization online. Some even suggested suing the games for fraud, given how similar the whole ordeal sounded to last month's Fyre Festival in the nearby Bahamas, which is now the target of a criminal investigation.

#Miami #WorldOutGames just got cancelled in front of me. People from everywhere around the globe are pissed about that awful organization ! — François Dallaire (@bfrankbd) May 26, 2017

One @OutGames athlete I spoke to is asking everyone to reverse card charges on Outgames registration claiming fraud https://t.co/aKguREe2kR — Cyd Zeigler (@CydZeigler) May 26, 2017

.@OutGamesMiami cancelled the day it was all to begin. WTF. Ppl have paid lots of $. The org. and Board should be sued! @CityofMiami @adidas — Alan Chaffe (@Alan_Chaffe) May 26, 2017

Lady Gaga's mother, Cynthia Germanotta, had been scheduled to receive an award at tonight's opening ceremony. Dance musician Kristine W, bandleader Tito Puente Jr., and former American Idol contestant David Herandez had been scheduled to perform. That event has been canceled.

But Morales's letter yesterday reveals that the games had been struggling for the better part of a year to meet the basic financial benchmarks the city had set for the 10-day event. The games were supposed to take place all across Miami-Dade County, including in Lummus Park, Soundscape Park, Flamingo Park, the Loews Miami Beach Hotel, the Colony Theater, the Fillmore Miami Beach, and the National Hotel. But there were warning signs for quite a while that the OutGames, which has been staged three previous times in other countries since 2006, was having trouble raising basic levels of money.

"In our effort to do everything possible to support World OutGames, the City has reduced deposits and extended deadlines, multiple times," Morales wrote. "In fact, with events set to begin tomorrow, the City has yet to receive the required $5,000 special event deposit and several other key permitting components have not been met. City staff is doing everything possible to make this event happen, and we are still willing to issue the permit in the final hour."

Morales wrote that coordinating the OutGames required weekly communication and scores of meetings dating back months. Since December, the city and OutGames staff have communicated weekly about police, fire, sanitation, transportation, and other city worker needs for the games. Morales wrote that the city has extended "every deadline" it gave the games, and that the organization was supposed to submit its final insurance and permitting paperwork by May 12. It did not.

"As of today's date," Morales wrote yesterday, "the event does not have a special event permit, nor have the producers delivered the required deposit, final site plans, and meter request."

As the OutGames melted down, the city then worked to relocate the games' events to cheaper or completely free venues: The Human Rights Conference, which will still go on as planned, was moved from the Miami Beach Convention Center to the Loews Hotel, which waived its rental fees and offered 25 percent cheaper food and beverage costs. Morales said finding cheap relocation spots for the opening ceremony, festival village, badminton volleyball, and basketball tournaments, and other cultural events required "exhaustive research" and "several weeks of in-depth conversations."

"On behalf of the staff and City of Miami Beach, we are very committed to our LGBTQ community, and have put all resources toward supporting World OutGames," Morales wrote. "We are dedicated to ensuring the success of OutGames events in the City of Miami Beach, and have done everything in our power to provide support. Staff has consistently been proactive, engaged, supportive and flexible with OutGames producers. We welcome and applaud the athletes, families, and visitors in attendance, and remain honored to be chosen as a host city known for our unwavering commitment to the LGBTQ community."

But, oddly, the OutGames' founder, Ivan Cano, gave an interview with the Miami Beach Community Newspapers a mere three days ago, stressing that everything was going great, and that the OutGames would be a swell time for everyone involved.

Q: What has it been like in getting everything ready for the 2017 games? A: As we near the kick-off to this event, each day brings an exciting, new challenge. Thanks to the help of our staff, volunteers, individual and corporate supporters and the City of Miami Beach, the momentum continues to give me the certainty that this will be a successful, well-attended 10-day event.

@OutGamesMiami We've received nothing but a short statement, nothing about our $225 USD registration fee, such short notice. #WorldOutGames @OutGamesMiami — Jam Michael McDonald (@mcjamdonald) May 26, 2017

@OutGamesMiami Do I still go to Miami? Do I get my money back? Why weren't we told about this sooner? How is this happening? #WorldOutGames @OutGamesMiami — Jam Michael McDonald (@mcjamdonald) May 26, 2017

Thankfully, the OutGames' cultural events will still go on as planned: You can still listen to transgender Venezuelan politician Tamara Adrián speak on sex- and gender-based discrimination in sports this weekend.

