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Critics Decry 'Laundering' of Casino Licenses

``Players International Inc., tainted in a scandal involving ex-Gov. Edwin Edwards in Louisiana, got out of its jam with a $425 million sale to Harrah's Entertainment.

``Station Casinos Inc. of Las Vegas, in hot water with Missouri regulators over allegations against a former company lawyer, left the state after selling to Ameristar Casinos Inc. of Las Vegas for $488 million.

``Hilton Hotels Corp., which spun off its casino business into Park Place Entertainment Corp. of Las Vegas, sold its Kansas City riverboat, the Flamingo Hilton, after accusations surfaced that it had funneled $250,000 in questionable payments to the chairman of the Kansas City Port Authority.

``The official's role in Hilton's selection as a Kansas City casino operator triggered a federal investigation that led to an agreement in which Hilton paid $655,000 in fines to avoid a criminal trial for its behavior.

``The Missouri Gaming Commission approved a deal in which Hilton would not be fined by that agency, but would give up its Missouri gaming license and sell the riverboat.

``Across the country, riverboat casino owners in trouble with state regulators have found profit in their problems. Faced with heavy fines or the loss of their licenses, they've sold their operations to less-troubled companies -- a practice gambling critics blast as license laundering.

``But while …gambling critics cite approved buyouts as examples of lax casino regulation, industry representatives say they're evidence of just the opposite.

``Frank Fahrenkopf, president and CEO of the American Gaming Association, said it's easier for some gambling companies to sell than jump through the hoops put up by various state regulators.

``…The cases involving Players, Stations and Horseshoe are the exception rather than the rule, Fahrenkopf said. He also said it's only fair for casino companies to recoup their investment in a state if they're forced out.

``…Riverboat profits also help out the states and municipalities that play host to the casinos, making it hard for regulators to threaten the most drastic penalty: closure.

``…Michael Fanning, a Montana gambling regulator and president of the North American Gaming Regulators Association, said gambling boards must consider the effects their decisions may have on innocent third parties, such as casino workers.

``Fanning stressed that each case is different. But he ticked off reasons for allowing buyouts, such as the cost and time spent on lawsuits and whether an offense is serious enough to merit a shutdown.

``…Station and Horseshoe still own casinos outside the states where they ran into trouble…”

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