Casino applications sought for last license

Casino applications sought for last license

The only prohibition on a site for the long awaited tenth casino in Illinois is that it not be located on the shores of Lake Michigan, said the chief legal counsel for the Illinois Gaming Board after the application process was reopened.

That comment from Michael Fries apparently leaves the door ajar, if not open, for the possibility of a casino in Rosemont.

Illinois Attorney General Lisa Madigan had questioned whether there were ties to organized crime by one of the applicants proposing to build a casino in Rosemont. Municipal officials denied those allegations.

Another part of a previous license process was Emerald Casino, which at one time had the tenth license for a location in western Illinois. The company was involved in legal actions for a number of years and eventually had its license revoked in December 2005.

So, the July 16 announcement of applications being available on July 18 for the last license in the state started a process which will include the selection of three finalists by Oct. 12, according to executives from Credit Suisse, one of the leading global financial firms which have experience in the gaming industry.

The Illinois Gaming Board will hold a public hearing at a yet undetermined date for people to comment, Fries said, with a goal of having the process completed before the end of the calendar year.

Credit Suisse expects considerable interest from companies worldwide because Illinois is a very attractive market for the gaming industry, said David Luwisch, director of the firm’s mergers and acquisitions group. A list of applicants will be made public by the end of September or early October, he indicated.

The fee for Credit Suisse will be 1 percent of the sales price with a cap of $4 million, according to Fries.

Gaming Board Chairman Aaron Jaffe said the situation is different than a previous process several years ago when “a dark cloud hovered over the board. The journey until December 2005 was tumultuous but it maintained the integrity of the board and the gaming industry.”

Asked at a July 16 press conference in Chicago why the process will be different and why problems will not again develop, Jaffe said this is a different board which will be transparent.

“That had not happened before.”

Fries added that the situation is not as contentious this time since license revocation proceedings are not running parallel to license applications.

He also said it was far too soon to talk about prices and would not commit to bids being no less than a certain amount.

David Berman, managing director of investment banking for Credit Suisse, also indicated that he did not have a price.

But a consultant said after the press conference that he had heard prices would probably be in the $300 million range. Gary Mack of Mack Communications in Woodbridge said that price range compared to the $518 million proposal by the Isle of Capri for a site in Rosemont during an application process in 2004.

Mack, a consultant for Rosemont, said he also heard that some of the bigger corporations would not be interested in making proposals because of the onerous process in Illinois and the high taxes in the state.

He said if a casino license were awarded to a company for a particular Rosemont site, the company could be six months ahead of other proposals because the location in the municipality’s entertainment district still has a moat there for a floating casino, although some steel structure is gone. He also noted the property is for sale, but Mack did not indicate what the price was.

As to whether Emerald Casino would get in the way of a current application, the consultant said “Who knows what Emerald Casino will do?”

Mack also touched on the topic of Illinois Attorney General Lisa Madigan getting involved in any application which involved Rosemont and a casino company. He noted that she could initiate legal proceedings just as any person could get involved in a court case.

The consultant explained that Rosemont has not been calling casino companies, but the municipality might be interested in working with a casino company to obtain the tenth license which is currently available. Mack said he could only take Illinois Gaming Board members at their word that Rosemont would be on equal footing with other applicants.

Another applicant from the previous list, the city of Des Plaines, could still be interested in having a casino.

“As of today there has been no change in the policy of Des Plaines seeking a casino license,” said city manager Jason Bajor, noting that it would be accurate to say Des Plaines might pursue a license.

No municipalities should be partners with private companies in operating a casino, said James Wagner, president of the Chicago Crime Commission, following the press conference. He said casinos should be directed only by private companies and referred to problems Chicago has had with licensing other types of businesses.

The whole process of casino applications in Illinois is directed by The Riverboat Gambling Act, which was enacted in February 1990. It made Illinois the second state in the nation to legalize riverboat gambling.

The act created the Illinois Gaming Board. The five-member board is appointed by the governor and confirmed by the State Senate. It administers a regulatory and tax collection system for riverboat casino gambling in Illinois, as well as licensing suppliers and employees of riverboat gambling operations.

Dan McLeister, Contributing Writer

Posted on Sunday, August 03, 2008 (Archive on Sunday, August 10, 2008)
Posted by jstoltz Contributed by jstoltz

Return