Emerald says board actions mock ruling

Maura Kelly Lannan

Thursday, June 30, 2005 | 11:09 a.m.

CHICAGO -- In the latest twist in the ongoing saga of the bankrupt Emerald Casino, members of the Illinois Gaming Board renewed its license Wednesday for four years -- but started the clock from the casino's 1999 renewal application, meaning the license already has expired.

Emerald attorneys complained that the board, which voted 4-1, was thumbing its nose at a court ruling that mandated the gambling license be renewed.

"They are not in compliance with the mandate by what they've done," Emerald attorney Michael Krzak said. "I think it makes the renewal completely moot and it's a shame the state loses all of the revenue by what they've just done."

A Cook County judge essentially ordered the board to approve Emerald's license earlier this month, finding that state law required gambling regulators to approve renewal and let Emerald move to Rosemont, a Chicago suburb near O'Hare International Airport.

The license held by Emerald is the state's only unused one and has been dormant since 2001, when the board decided not to renew it. Gaming Board chairman Aaron Jaffe says the state has lost about $500 million in revenue because the casino's license is unused.

At the same time the board voted not to renew Emerald's license, the board also decided to revoke Emerald's license because it said some investors had mob connections and that company officials lied to the board.

Emerald appealed the denial of its license, which resulted in the court order to renew it. Emerald also appealed the revocation of its license, which led to the hearing in which board and Emerald attorneys have been arguing about the license revocation. That hearing will continue, Jaffe said.

Jaffe said the board's normal procedure is to renew a license for four years from the date of application, which was Sept. 24, 1999, in Emerald's case. He said the board followed the court order and that Emerald must reapply for renewal if it wants to be current.

Kevin and Donald Flynn, a father-son team who were the chief investors in the casino, have been stubbornly fighting the state's attempt to revoke the license with high-priced lawyers and legal maneuvers meant to delay the hearing.

"They want to stop the revocation hearing. That's what they want," Jaffe said of Emerald attorneys. "It's desperation tactics, absolutely desperation tactics ... Why are they so afraid of the revocation proceeding?"

Board member William Dugan voted against the renewal because he said the revocation hearing should stop.

"I think it's ludicrous. They punished the culprits, supposedly the culprits of Emerald," Dugan said. "So now, what's the purpose of continuing with the revocation hearing. Who do you want to punish now?"

About two weeks ago, Emerald announced it had rejected two proposed shareholders who have alleged mob ties. It also said Kevin Flynn would withdraw as a proposed shareholder and a member of its board of directors had resigned.

The move was intended to rid the casino of any shareholders who have been singled out by the Gaming Board and Attorney General Lisa Madigan as questionable.