Illinois official vows to kill deal on casino

Nicole Ziegler Dizon

Thursday, May 23, 2002 | 9:53 a.m.

CHICAGO -- Attorney General Jim Ryan dealt a serious blow Wednesday to supporters of a proposed riverboat casino in Rosemont, saying he is prepared to block any deal that would let Emerald Casino Inc. sell its gambling license.

"I can't conceive of any deal or arrangement, frankly, that the attorney general's office could approve," Ryan said.

The attorney general's announcement came after the Illinois Gaming Board met in closed session to consider a new settlement offer from Emerald. The board postponed a hearing on Emerald's license until May 29 and said officials would continue to meet with the casino company.

C. Barry Montgomery, an attorney for Emerald, would not give details of the new proposal. Ryan said it involved some profit for shareholders as well as the possibility that the casino would be located somewhere other than Rosemont.

A source familiar with the proposal said it would give the state about $500 million, all Emerald investors would see an 8 percent return and the buyer -- to be determined by the board -- would have to assume between $100 million and $150 million of Emerald's liabilities.

The board previously has rejected a number of offers from the casino company, including one that would have given $330 million to the state from a $615 million buyout deal with Las Vegas casino giant MGM MIRAGE.

Emerald's casino license has been in limbo since January 2001, when the board rejected the company's request to build a casino in Rosemont, moving its license from a shuttered boat in East Dubuque. The board alleged that company executives Kevin and Donald Flynn had lied to investigators and that some shareholders had ties to the mob.

Ryan, the Republican nominee for governor, has repeatedly said the Flynns should not be allowed to profit if their alleged wrongdoing is proved.

"If there was an attempt at sale, based on what I know now, I've instructed my staff to be prepared to take legal action to protect the public interest," he said.

Ryan added that he was concerned about Rosemont as a casino site because of a pending federal investigation involving the village and the casino. Investigators have subpoenaed all Gaming Board records related to the Emerald proposal.

Emerald has appealed the board's decision rejecting its license renewal, and the board was scheduled to begin presenting its case against the company before an administrative judge Thursday.

"We understand the attorney general's concerns and we intend to meet with Emerald Casino over the next several days," the board said in a prepared statement.

Board Chairman Gregory Jones declined to comment further, explaining that the matter was a "sensitive issue."

Gov. George Ryan, who is not related to the attorney general, recently dispatched his top budget official and chief of staff to meet with Gaming Board members individually about the state's $1.3 billion budget hole. The governor's office said the meetings were not intended to pressure the board into any decision, and members subsequently rejected the $330 million offer from Emerald.

The governor has replaced all but one of the Gaming Board members involved in the original Emerald decision. The term of that member, Jones, expires this summer.