State OKs casino purchase over investigators’ objections

Wednesday, Jan. 5, 2000 | 9:44 a.m.

Investigators for the Illinois Gaming Board in their November report said Binion's record while running casinos in Las Vegas, Louisiana and Mississippi was fraught with questionable practices and associations, the Chicago Tribune reported.

Shortly thereafter, on Nov. 30, the Gaming Board approved a $609 million deal for Binion's Horseshoe Gaming to buy the Empress riverboat casinos in Joliet, Ill., and Hammond, Ind. The regulators' decision, on a 3-1 vote with one abstention, came on the last day before deadlines for financing and regulatory approval that could have sunk the deal.

Binion's attorney, Anton Valukas, said the report is full of inaccuracies and misinterpretations.

"The spin that (Gaming Board) staff was taking on these things was wrong, and their facts were dead wrong," he said. "Some of these charges are frankly scurrilous."

The staff report said Binion, the chairman and CEO of Horseshoe, left "a trail of poor business practices, regulatory violations and financial malpractice." It also questioned his association with certain individuals.

According to the report, a copy of which was obtained by the Tribune, Binion put up $2 million in 1993 to bail out of jail a high-stakes gambler the Nevada Gaming Control Board said was associated with narcotics and firearms sales and money laundering.

Valukas acknowledged the $2 million bailout of Kamel Nacif but said the charges against him were dropped and the money was repaid. He said there was no evidence that Nacif had been arrested on drug, gun or money-laundering charges.

In Louisiana, Binion offered "highly irregular" partnerships to four people who were not investors in his casino ventures and appeared to do little actual work other than to offer ties to politicians and "local influence," the report said.

Valukas denied any improprieties with the Louisiana operation, saying that all shareholders had been examined thoroughly by Louisiana casino regulators.

Gaming Board Chairman Robert Vickrey, who voted for the purchase, declined to comment on specific allegations in the staff report. But he said he disagreed with the staff's conclusions and believed that after more than a year of investigation it was time to take action.

Vickrey has also pointed out that even though Binion's company was approved, Binion himself must pass more scrutiny before receiving an individual license allowing him to become a gambling executive in Illinois. State law gives the board discretion to refuse a license to any "person or entity whose background, reputation and associations will result in adverse publicity" for the state's casino industry.

Gaming Board administrator Sergio Acosta said after the Nov. 30 vote that staffers had told the board they wanted more time to investigate before making a recommendation on the sale. Acosta declined to confirm the report's contents and said it was a violation of the riverboat gambling law to disclose staff reports.