MGM MIRAGE still trying for new casino in Chicago

David Strow

Friday, Jan. 18, 2002 | 10:52 a.m.

MGM MIRAGE's efforts to place a casino in the heart of metropolitan Chicago may soon be moving forward again.

MGM MIRAGE had tried to acquire an Illinois gaming license from Emerald Casino Inc. for a casino located in the town of Rosemont, a small village next to O'Hare Airport on Chicago's west side. Emerald had previously been blocked by the Illinois Gaming Board in its effort to build a casino in Rosemont.

The board also blocked Emerald's efforts to sell the license to MGM MIRAGE, saying in August that Emerald had no right to sell the license, and instead had to turn it over to the state.

However, sources told the Las Vegas Sun this week that the board's new administrator, Philip Parenti, may have reached a settlement with Emerald that would clear the way for MGM MIRAGE to assume the license. The proposed settlement could be considered by the five-member board as early as this month, they said.

The sources placed MGM MIRAGE's investment in the Rosemont deal at $700 million, which would include the price of the license, land acquisition costs and the development of a casino property.

Parenti declined to comment on a possible settlement, but he has hinted before that he was interested in seeing the Rosemont deal move foward. Upon assuming the top position at the board in October, Parenti said he was "willing to take a fresh look at the entire (Rosemont) situation," saying he was concerned over the loss of hundreds of millions of dollars in tax revenues.

"It would be foolish to turn my back and close my eyes to whatever proposals are there," Parenti said in October.

Emerald attorney William Kunkle also declined comment. MGM MIRAGE spokesman Alan Feldman said he was unaware any agreement had been struck between Emerald and Illinois.

"Their discussions have to take place absent us ... it has nothing to do with us," Feldman said. "Once they've cleared that (the issues with Emerald), we're in a position to make our credentials known (to Illinois)."

Feldman said MGM MIRAGE is "absolutely" interested in a deal to enter the Chicago market.

"If the control board does, at some point, resolve the issues with Emerald, we are completely prepared to move forward, and would hope to be in a position to do so quickly," Feldman said.

Chicago attorney George Leighton, who represents a group of minority investors in Emerald, also said he was unaware a deal had been reached. "But it doesn't surprise me," he said.

"My understanding is, as far as the Emerald Casino and MGM MIRAGE are concerned, they've reached an agreement, but they had to get certain rulings from the gaming control board, and that's what was holding it up," Leighton said.

Feldman said he couldn't discuss whether MGM MIRAGE had a signed deal with Emerald, since the board's issues with Emerald had yet to be resolved. But he said the parties were very close to a deal when the board halted the talks in August.

"We had entered into a negotiating period to work out those final details, and that's when the control board said, 'Stop,"' Feldman said.

MGM MIRAGE competitors Harrah's Entertainment Inc. and Mandalay Resort Group already operate casinos in the lucrative Chicago-area market, but the Rosemont casino would be far closer to the city than any casino currently in operation. Emerald had tried to transfer its license from East Dubuque, Ill., to Rosemont, but was struck down by Illinois regulators in January 2000.

Illinois board officials alleged Emerald's controlling shareholders, Donald and Kevin Flynn, had made "false and misleading" statements to the board. The board also claimed several minority investors in Emerald, as well as a construction company on the Emerald project, had connections to organized crime.

In August, MGM MIRAGE announced it had entered into negotiations to acquire the license from Emerald. But Illinois quickly quashed any possible transfer, saying Emerald had no right to transfer the license and instead had to surrender it to the state for auction. While the board had no issues with MGM MIRAGE's suitability, officials told the company it did not have any standing in the Rosemont case, and refused to meet with MGM MIRAGE officials.