Critical Illinois report on Binion was reviewed in Ind.

Thursday, Jan. 6, 2000 | 9:51 a.m.

Binion, who recently purchased The Empress casinos in Hammond and Joliet, Ill., for $629 million, was criticized in a confidential Illinois Gaming Board report that alleged Binion engaged in shady business practices and questionable personal relationships.

Hoosier regulators had the same information when they conducted two separate background probes on Binion but found no serious problems before approving his takeover of The Empress in Hammond in late August.

"Our findings indicated as evidence by the vote of the committee that he was suitable for licensure," said Jenny Arnold, spokeswoman for the Indiana Gaming Commission.

The Illinois report, which was leaked to the Chicago Tribune after Illinois regulators voted Nov. 30 to allow Binion's Horseshoe Gaming Corp. to buy The Empress boats, questioned a $2 million bond posted by Binion after a friend was arrested in Nevada in 1993. It also questioned certain aspects of Binion's business dealings.

But the Illinois report failed to mention that the charges against Binion's associate later were dropped, said Anton Valukas, a former U.S. attorney for the Northern District of Illinois and the lawyer who represented Binion before Illinois regulators.

Valukas said he submitted information to the board disputing other allegations in the report before the committee approved the sale. But he was not sure if the report's authors had access to the information.

He noted that some of the allegations were drawn from a lawsuit filed against Binion by his sister, charges later dismissed by the courts as groundless.

"The report, not the board's conclusions, was factually flawed and the opinions that were found in there were just unjustified," he said.

Binion actually was investigated twice by Indiana authorities. In 1995, he was subject to a background check when he applied to open a riverboat in Harrison County. Binion favorably impressed regulators with his business acumen, but the license went to Caesars because regulators believed Caesars would be able to pour more money into the project.

The second background check began early last year after Binion inked a deal to buy Joliet-based Empress Entertainment, which owns the Hammond and Joliet casinos.

"If he was a friend of yours he was very, very loyal - loyal perhaps to the point of foolishness," said Indiana Gaming Commission member Thomas Milcarek of LaPorte. "He was a pretty up-and-up guy. I think he's a real charismatic man."

Illinois Gaming Board Chairman Robert Vickrey said Tuesday the confidential report was not a factor in the Nov. 30 vote because it was Binion's company, Horseshoe Gaming Corp., that won the gaming license, not Binion himself.

Under Illinois casino laws, corporate entities can hold gaming licenses. Prominent individuals involved in such corporations, such as Binion, need approval to act as a "key person" before they assume any hands-on control of a casino operation.

The gambling board is not expected to vote on whether to give Binion and the other big investors in Horseshoe Gaming "key persons" status until spring, Vickrey said.

Valukas said Indiana cleared him as a "key person," as has Nevada, Louisiana and Mississippi.