MGM MIRAGE Illinois casino license purchase plan rejected

Thursday, Aug. 16, 2001 | 10:51 a.m.

Illinois gaming authorities told the owners of a proposed Chicago-area casino that plans to sell their license to Las Vegas-based MGM MIRAGE are "dead on arrival," the Chicago Sun-Times and Reuters reported.

Both news outlets cited unnamed sources familiar with the situation. The message was delivered during a Tuesday meeting between Illinois gaming officials and lawyers for Emerald Casinos Inc., which has been in negotiations with MGM MIRAGE to sell Emerald's casino license in the northwest Chicago suburb of Rosemont.

Gene O'Shea, spokesman for the Illinois Gaming Board, declined comment on the reports.

"We are hopeful any and all outstanding issues with the (Illinois) gaming board can be resolved to everyone's satisfaction," said MGM MIRAGE spokesman Alan Feldman. "We've had no discussions with the gaming board, and I don't think it'd be appropriate to make mention of what conversations we've had with Emerald."

Emerald holds a casino license for a closed riverboat casino in East Dubuque, Ill., and attempted to shift this license to a new casino in Rosemont. The Illinois Gaming Board denied this request in January, citing "false and misleading" statements by Emerald majority owners Donald and Kevin Flynn. The board also cited concerns over alleged organized crime links of some Emerald minority shareholders.

Three weeks ago, MGM MIRAGE announced it was in talks to acquire the Emerald license, which would allow it to build a casino in Rosemont. Within days of the announcement, the Illinois Gaming Board issued a statement saying the discussions "were not acceptable." Tuesday's meeting was the first direct contact between Emerald and the board to discuss the proposed transaction; board officials have refused to meet with MGM MIRAGE to discuss the deal.

During the meeting, the Sun-Times reported, board officials said Emerald does not have the right to sell the license, and must instead surrender it to the state. The board would then award the license to a new company in an open bidding process.

A source close to the deal told the Sun-Times the board's concerns were with Emerald, not MGM MIRAGE, which officials called "a respected company."