Illinois officials question deal with Emerald

Maura Kelly

Tuesday, Dec. 10, 2002 | 9:26 a.m.

CHICAGO -- Illinois gambling officials said Monday they have serious concerns that the operators of Emerald Casino are not complying with a settlement that forces the casino company to sell its license and lets state regulators put the casino where they choose.

Illinois Gaming Board members said Emerald, which was ordered to file for bankruptcy in September, has not submitted a reorganization plan yet. That plan, which would outline how proceeds of the sale of the license would be distributed, is due next week under the settlement terms.

Board members also said a letter that Emerald is using to sell the license touts Rosemont, a Chicago suburb near O'Hare International Airport, as a preferred location for the casino. However, the board has insisted the casino could be located anywhere in the state.

"Emerald stands accused of repeatedly lying to the board. How could anyone believe they're acting in good faith now?" Gaming Board member Ira Rogal said. "Their conduct in bankruptcy court is unacceptable to me."

The settlement, reached in August, is meant to put to rest a legal battle with Emerald that began in January 2001 when the board rejected the company's application to build a casino in Rosemont.

At the time, the board said Emerald executives Donald and Kevin Flynn had lied to Gaming Board investigators and alleged that some investors in the project had organized crime ties.

Emerald appealed, and the board began laying out its case in an administrative hearing this spring that was put on hold because of the settlement.

On Monday gambling officials cited the lack of a reorganization plan and the letter touting Rosemont as examples that the settlement was in jeopardy of failing.

"It doesn't matter what you say. It's what you do. We want to know what they're doing to comply," Gaming Board Administrator Philip Parenti said.

Attorneys representing Emerald and Donald Stephens, mayor of Rosemont, did not immediately return calls seeking comment.

Robert Shapiro, an attorney representing the Gaming Board, said the process has started to become "somewhat worrisome." He said the reorganization plan should have been filed quickly.

"We still do not have even so much as a draft," he said.

He also said the casino company should not lean toward Rosemont in its letter to sell its license.

"Rosemont is neither in nor out. It has to compete with all other potential applicants to acquire Emerald," he said.

Elzie Higginbottom, chairman of the Gaming Board, said he is willing to talk to Emerald Casino operators about the settlement's terms to clear up any confusion.

"We would like to get this license out and bring revenue to the state of Illinois. However, it has to be a fair process," he said. "The people who made the deal have to live up to the deal."