Park Place appeals order on Louisiana casino

Alan Sayre

Wednesday, April 14, 1999 | 10:26 a.m.

NEW ORLEANS -- An escrow account ordered by state gambling regulators in a dispute involving the two partners of Bally's riverboat casino in New Orleans has not been set up and one of the combatants will get a chance to have the order nullified.

Last month, the Louisiana Gaming Control Board ordered the gambling proceeds of Bally's placed into escrow as a legal fight continues between majority owner Norbert Simmons and the casino's minority partner and operator, Bally's Louisiana Inc.

Simmons' company, Metro Riverboat Associates, filed suit last year, complaining that Hilton Hotels Corp., which owned Bally, had taken various actions that could hurt Metro. For example, Simmons claimed the boat took high-interest loans from other Hilton-affiliated companies.

Simmons later complained in court that he was given no voice in Hilton's spinoff of its casino interests into a new company, Park Place Entertainment of Las Vegas.

Last month, the board ordered the escrow account until it decides whether Park Place should keep a license to operate. Under the plan, the casino's proceeds were to be placed in an escrow account controlled by the board. Routine bills would have been paid from the account. The target date for the escrow account was April 1.

The gambling board has granted Bally's Louisiana a re-hearing for April 23. The escrow account has not been set up, said Thomas Tucker, an attorney for Metro.

In its request for a second hearing, Bally's contends the board did not have the authority to order the escrow account and the action was taken without proper notice to the company. Bally's also said the order was not sustained by any evidence.

Last month, gambling board Chairman Hillary Crain said Louisiana regulators had found Park Place suitable as a corporation. Crain said an investigation is continuing into some Park Place officials, as well as Hilton's regulatory problems in Missouri.

Crain said that if Hilton's actions in Missouri make the company unsuitable to do business in Louisiana, Park Place could lose its ability to participate in the New Orleans riverboat.

In August, federal prosecutors agreed to let Hilton pay $655,000 in a settlement after investigating whether the company had rewarded Elbert Anderson, the former chairman of the Kansas City Port Authority, for supporting Hilton's casino project in that city.

Anderson was convicted on unrelated federal charges of bribing a former member of the Kansas City Council and the chairman of the Jackson County Legislature.

Hilton made a $250,000 grant to a firm Anderson controlled through an associate. The Flamingo casino at Kansas City was built on riverboat property controlled by the port authority when Anderson was still chairman of the agency.

In its agreement with Hilton, the U.S. attorney said the company had fully cooperated with its investigation and no current company officers and employees were aware of any wrongdoing. At the same time, Hilton accepted responsibility for the actions of its former employees.

Late last year, Missouri prosecutors indicted Mark Rousseau, a former senior vice president for Hilton, on charges of lying under oath to the Missouri Gaming Commission.