Illinois regulators OK Harrah’s-Players buyout

James Webb

Wednesday, March 22, 2000 | 9:11 a.m.

CHICAGO - Illinois regulators cleared the way for Harrah's Entertainment Inc. to acquire Players International Inc. in a $425 million deal that involves casinos in three states and makes Harrah's the first dual casino operator in the state.

The board on Tuesday also issued a $125,000 fine against the Casino Queen riverboat in East St. Louis, citing repeated incidents in which underage patrons were allowed on board.

The Players acquisition was held up for a month while Harrah's officials came up with a compromise that eased the Illinois Gaming Board's concerns about a pending lawsuit challenging recent changes in state gambling law, including a provision making it legal for companies to own more than one casino in the state.

Harrah's already owns a casino south of Chicago in Joliet and is acquiring the Metropolis riverboat in far southern Illinois from Players. Regulators had said they didn't want to be in the position of having to shut down the Metropolis riverboat and throwing about 800 employees out of work if the new law is overturned.

On Tuesday, the five Gaming Board members signed off on language that would require Harrah's to put the Metropolis property in the hands of a trustee if the law is overturned, while it seeks to sell the casino or change the law. If Harrah's couldn't sell the property or change the law in a year, it would have to forfeit its Metropolis gambling license and turn the last year's profits over to the state, Harrah's officials said.

"It's been a long ordeal," said a relieved Tim Wilmott, president of Harrah's eastern division, after the 5-0 vote. The deal was to close Wednesday.

Wilmott said Harrah's will keep the current management and employees at Metropolis and plans to spend $30 million to $40 million improving the property in the next year. That will ultimately include replacing the current boat with the two Harrah's boats from Joliet, Wilmott said.

Missouri and Louisiana casino regulators had already signed off on the sale, which is playing out under the shadow of an extortion scandal in Louisiana.

Federal prosecutors claim that Players executives funneled money to former Louisiana Gov. Edwin Edwards and his son, Stephen, to get a license and protection while Edwards was governor. The men have pleaded innocent, and testimony on the alleged scheme has been aired in a wide-ranging racketeering trial.

Neither Players nor its current executives were indicted in the case, but Louisiana regulators required Players to pay $10.8 million in fines and sell its riverboat operations there as a result of the scandal.

Illinois regulators have not mentioned the scandal in their discussion of the Harrah's-Players deal.

Harrah's, based in Las Vegas, is one of the nation's largest gambling companies, with 18 U.S. casinos. Players, based in Atlantic City, operates a Paducah, Ky. horse racing track in addition to the two riverboat casinos in Lake Charles, La., and the riverboat in Metropolis.

Under the deal, Harrah's also would gain complete control of a four-casino dockside facility jointly operated by the two companies in Maryland Heights, Mo.

The Gaming Board voted 5-0 to fine the Casino Queen, citing 15 incidents in which underage patrons boarded the riverboat. In one alleged case, a 15-year-old boy was allowed on the riverboat without being asked for identification, according to Gaming Board Administrator Sergio Acosta.

Casino Queen officials have stipulated to some of the facts in the board's complaint, which will be made available Wednesday, Acosta said. Casino officials have not yet said whether they will appeal the action.