Rosemont tops bidding for 10th casino

Rosemont tops bidding for 10th casino

A few surprises surfaced in the initial round of seven applications to the Illinois Gaming Board for the 10th and last casino license for Illinois.

The board will select three finalists in the coming weeks based on the amount of bids and other factors, according to a board spokesman.

One surprise was a bid by Trilliant Gaming Illinois LLC for $435 million, which was about $100 million higher than the general range expected by industry observers. Board information on the web site (www.igb.state.il.us) indicates that equity stakeholders are Alex Yemenidjian, Amenco Holdings, LLC, Onex Corporation and Onex Partners, GP Inc.

The proposed site is in Rosemont west of River Road between Balmoral and Bryn Mawr avenues, fronting on I-294. That site, which was sold by the village of Rosemont to Trilliant, was the proposed location for a previous casino application, which was rejected because of alleged ties to organized crime.

Another surprise was a bid for $150 million by Hawthorne Gaming LLC for a site at 3501 S. Laramie Ave. in Stickney, on or near the existing Hawthorne Race Course. Equity stakeholders are Jose Canfora and the estate of Thomas Carey.

The bid to combine a casino with horse racing could confuse other industry people who are discussing the possibility of putting slot machines at horse racking tracks, an industry source commented.

The other five applicants and bids were:

•   Waukegan Gaming LLC for $225 million for the former Lakehurst Mall site near Waukegan Road and Route 120 in Waukegan. Equity stakeholders are SL BDK Waukegan LLC, (Richard Stein, Alan Ludwig, Charles Bidwell, Edward Duffy, Jeffrey Krol) Clairvest Group Inc., Gaming Investment Fund LLC and Michael Pizzuto.
•   Southside Casino LLC for $175 million for a site at the northwest corner of the interchange adjacent to the intersection of I-80/294 and Halsted Street in Harvey. Equity shareholders are David Handlon, James Griffin, Satish Gabhawala, William Krug, Jonathan Harris, John Argianis and William Tsourapas.
•   Calumet Gaming LLC for $150 million for a site on Torrence Avenue one mile north of the Intersection of I-80 and I-94 in Calumet City.
•   Midwest Gaming & Entertainment LLC for $150 million for a site at the northwest quadrant of Des Plaines River Road and Devon Avenue in Des Plaines.
•   CCH Gaming Partners LLC for $60 million for a site at Cicero Avenue and 167th Street near the convergence of I-57 and I-80.

Tom Swoik, executive director for the Illinois Casino Gaming Association said the number of bids was pretty close to what he expected. But pricing was a different matter, he said, noting that the highest bid among the seven applicants was above the $300 million range he expected. A bid in the $500 million range was made a few years ago for a license which was not granted.

The dollar amounts of each applicant are hard to judge, according to the association executive.

“I don’t know what contingencies are involved in addition to the dollar amount which has been disclosed at this point,” he said. “I don’t have a clue and I would not even guess until I see more details at a later date.”

Swoik added that the price of other bids could have been pushed down by such factors as the Illinois smoking ban reducing casino revenue, the difficult economy in general and “the instability of the Illinois legislature.”

He also pointed to the high 50 percent tax rate in Illinois compared to 35 percent in Indiana and 25 percent in Iowa. The tax is paid on adjusted gross revenue after paying winnings.

Swoik said he was surprised by the fact that all applicants were proposing a casino at various locations in the Chicago suburbs. Swoik had heard that Danville and Rockford were possible sites for the 10th casino.

He also noted that approximately $1 billion has been lost in revenue for the state of Illinois since the last casino license was not granted five years ago after there were some problems with an application. That estimate is based on the assumption that last casino license would have produced $180 million to $200 million in taxes, as have some of the highest volume casinos in the state.

Michael Fries, chief counsel for the Illinois Gaming Board, said a date to select the three finalists had yet to be determined. He said a schedule would be based on working backward from the end of the year goal for selecting one applicant to receive the 10th license.

The attorney said he had no expectation about the number of applicants seeking the license. Fries also indicated he did not have a response or position about the amounts of money bid by the seven applicants for the one license.

A spokesman for the board’s financial consultant, Credit Suisse, also declined to answer questions. Duncan King, media relations manager, said “We do not comment in the middle of a process.” When an announcement was made about applications being available this summer, company executives said they expected interest from organizations around the world since Illinois was a good gaming market.

On other aspects of the current situation, Fries noted that factors other than money would be considered such as the types of financing used by applicants as well as revenue sharing with other communities in the area of the casino.

The board will promptly review and evaluate all applications submitted and select the three finalists as soon as practical, according to Fries. He said that upon selection and public disclosure of the finalists, additional details of all the applications received may be made publicly available at the discretion of the board.

“The board expressly reserves the right in its sole and absolute discretion to evaluate the terms and conditions of any application and reject any application and to terminate discussion with any parties without assigning any reasons therefore,” he said. “Neither the board nor Credit Suisse shall have any liability to any prospective applicant as a result of the rejection of such prospective application or the acceptance of another application.”

Within approximately 10 days of being selected as a finalist, each applicant will make a presentation to the board at a session open to the public. Shortly after those meetings the board will hold an open session to receive public comment regarding the presentations made by the finalists.

The situation in Illinois can not be compared with other states, because each state has a different process, according to Brian Lehman, communications manager for The American Gaming Association.

The 12 states with commercial casinos are Colorado, Illinois, Indiana Iowa, Louisiana, Michigan, Mississippi, Missouri, Nevada, New Jersey, Pennsylvania and South Dakota.

Those states with riverboat gambling are Illinois, Indiana and Missouri.

Those states with both land-based casinos and riverboat casinos are Iowa, Louisiana and Mississippi.

The Illinois Gaming Board Web site is www.igb.state.il.us

Dan McLeister, Contributing Writer

Posted on Thursday, November 06, 2008 (Archive on Thursday, November 13, 2008)
Posted by jstoltz Contributed by jstoltz

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