Tuesday, December 20, 2005

Gaming Board Pulls Casino License

In a unanimous decision, the Illinois Gaming Board today stripped the bankrupt Emerald Casino of its gambling license, saying its managers and owners lied to regulators and allowed people with ties to organized crime to become investors. Emerald officials, who wanted to open a gambling house in northwest suburban Rosemont, are expected to appeal the decision to the Illinois Appellate Court.

The regulatory saga began in 2001 when a board made up of entirely different members first said the casino's owners should turn over their license.

In announcing its opinion, the board agreed with retired federal Judge Abner Mikva, who oversaw nearly two months of testimony in which Emerald argued that the punishment of stripping its license was too severe. But Mikva said in an opinion last month that Emerald's officials lied to regulators and played "fast and loose" with the facts in their zeal to open a casino.

"Judge Mikva said it best," board Chairman Aaron Jaffe said, when he wrote "the people who operated Emerald and who did this deal operated on the premise of 'Catch me if you can.'

"My feeling is they were caught, they lost their game of 'Catch me if you can,'" Jaffe said. "They were caught, and they should lose their license."

State lawmakers passed legislation to allow casino operators to move their struggling operation to Rosemont in 1999 and former Gov. George Ryan signed it. At the time, it was considered a done deal. But the gaming board tripped up those plans when in 2000 and 2001 it raised questions about some investors in the project. Board staff accused the main owners of the Emerald, the Flynn family, of lying to them.

Although they did not technically play a role in the board's decision, questions also were raised about ties between municipal leaders in Rosemont, including longtime Mayor Donald Stephens, and organized crime figures. Illinois Atty. Gen. Lisa Madigan has also raised similar questions about links between Stephens and the mob. Stephens has repeatedly denied the accusations.

As part of the deal reached in 1999, legislators guaranteed that 20 percent of the owners of the casino would be minorities and women. Several of the so-called 23 "minority investors" were in attendance at the board meeting today and complained the board's decision means they will lose the money they put into the project. Collectively, the group invested nearly $33 million. "This investment has been wiped out today. It's been wiped out on this Christmas Eve. We have nothing," said one of the minority investors, Chaz Ebert, wife of Sun-Times movie critic Roger Ebert.

Emerald attorney Robert Clifford said the casino would appeal the board's decision to the 4th Appellate Court in Springfield. Clifford said any investors who lied or misled regulators or had other ties the board found objectionable were willing to drop out as investors, but the board never considered that offer. He said by not accepting the offer, the case will continue in legal circles for at least another two to possibly five years. "This hearing was all about preventing this casino from going to the Village of Rosemont," Clifford said.

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