Saturday, July 1, 2000 | 8:44 a.m.
CHICAGO - Illinois regulators on Friday deemed Jack Binion unfit to hold a license as chief owner of Joliet's Empress Casino, leaving the riverboat casino's future in limbo.
The five-member Illinois Gaming Board voted unanimously to deny an owner's license to Horseshoe Gaming Inc. CEO Jack Binion, after a report that staff investigators uncovered questionable business practices and compliance issues involving Binion in Nevada, Louisiana and at the Joliet casino.
Board Administrator Sergio Acosta would not specify what the objections were, but they will be outlined in a written notice of denial that will be sent to Binion. Binion then will have five days to ask for an administrative hearing, Acosta said.
Binion owns controlling interest in Horseshoe Gaming, which bought the Empress casinos in Joliet and Hammond, Ind. for $629 million last year.
He did not attend the meeting but his attorney, Anton Valukas, said Binion and Horseshoe will appeal the decision. A spokesman would not say if Binion would sell his interest in the boat if he lost on appeal.
"I feel that the information we provided the staff and the board was information which would more than justify the board following the lead of Indiana, Louisiana, Mississippi and Nevada," in granting Binion a license, he said.
Valukas would not say what the Gaming Board's concerns were or what information he provided.
Although the casino's license technically expired Friday, it remains in effect until the board issues a final denial, Acosta said. Such a denial probably would be automatic if Binion fails to appeal, he said.
Friday's action comes seven months after the Gaming Board approved the sale of the Empress casino to Horseshoe over the objections of its investigators, who said they wanted more time to investigate Binion's business dealings.
Under Illinois law, corporations can hold gaming licenses. Prominent people in the corporation, such as Binion, need approval to act as a "key person" before they assume any hands-on control of a casino operation.
At the time the sale was approved, staff investigators said Binion left "a trail of poor business practices, regulatory violations and financial malpractice," according to a staff report obtained by the Chicago Tribune.
The report said 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.
But Valukas said the man was arrested for a tax code violation and that the charges were dropped and the money repaid. He said there was no evidence that man was involved in narcotics, gun sales or money laundering.
Investigators also said that Binion offered "highly irregular" partnerships to four people in Louisiana 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." Valukas has denied any improprieties with the Louisiana operation.
The Gaming Board also said Friday that it has the right to approve or deny a license renewal for the Emerald Casino, which developers want to build in suburban Rosemont.
A group of Lake County developers that wanted a shot at the Rosemont license filed a lawsuit over last spring's legislation allowing owners of a defunct East Dubuque riverboat to move their casino license to Rosemont. The law states the Gaming Board "shall" approve the deal.
But regulators adopted a legal interpretation that says the law only requires the board to allow Emerald to apply for license renewal, but the board has full authority to grant or deny the license after it goes through the normal renewal process.
The board has been under pressure by Emerald developers to grant the license and allow the lawsuit to take its course, but board Chairman Gregory C. Jones said a judge has advised the board to wait until the suit is settled.
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