Illinois regulators outline problems with casino owner Binion

James Webb

Thursday, July 20, 2000 | 9:26 a.m.

CHICAGO - Illinois gambling regulators have formally denied Horseshoe Gaming boss Jack Binion a license to operate the Empress Joliet riverboat, citing a pattern of rule violations and other problems at his casinos in Illinois, Louisiana and Nevada.

The Illinois Gaming Board listed 19 specific instances that it said justified its June 30 decision to reject Binion and not to renew the license for Empress. The examples included past controversies for which Binion has been investigated, and in some cases fined, in other states as well as new accusations alleging problems since Horseshoe bought the Empress in November.

In a seven-page letter to Binion and Empress, the board said Binion has demonstrated "an inability or unwillingness to comply with and act in accordance with statutory and regulatory requirements concerning the gaming industry.

"He has also demonstrated a propensity to enter into highly irregular contracts and financial and business relationships that cannot be adequately justified and show a lack of financial integrity," the letter continued.

Horseshoe officials said Wednesday they would exercise their right to continue operating the Joliet casino while appealing the decision. They noted that Binion and the company are approved to operate his other casinos in Indiana, Louisiana, Mississippi and Nevada.

"When the state of Illinois approved us last November, we made commitments to the state, to Will County, the city of Joliet and to our employees, including the many who relocated their families to our new corporate headquarters here," Binion said in a statement from Joliet. "We're going to do what we need to do to see that this wasn't done in vain."

Binion owns controlling interest in Horseshoe Gaming Holding Corp., self-described as the nation's largest privately held gambling company, and he is considered an integral part of its five-state operation. The company has 9,000 employees, 2,500 from Illinois, and annual revenue of approximately $1 billion.

It was unclear what effect, if any, the Gaming Board's actions would have on regulators in other states.

The Gaming Board voted 5-0 on June 30 to deny Binion the required personal approval to run the casino and refused to renew the Empress license, despite voting in November 1999 to approve the deal for Horseshoe to buy the Empress riverboat casinos in Joliet and Hammond, Ind., for more than $600 million. Indiana regulators had already signed off on the deal but made their approval contingent on the decision in Illinois.

At the time, board officials said the background investigation of Binion and other so-called "key persons" at Horseshoe would be completed later, while the transition to new ownership took place. Then in January it was learned that regulatory staff members had recommended against the sale, citing concerns with Binion's personal associations and his business practices at other Horseshoe casinos.

Gambling critics cried foul, and Gaming Board Chairman Robert Vickrey resigned in the wake of the disclosure, citing personal reasons.

Among the problems cited by Illinois regulators were: