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Las Vegas Execs Mostly Mum on Chicago

FROM STAFF AND WIRE REPORTS

An official with MGM Mirage said Tuesday he doesn't expect any major casino operators will be interested in Chicago Mayor Richard Daley's proposal to manage a city-owned casino.

"Most companies would much prefer to make an investment, pay taxes, take all the risk and reap the benefits of owning and operating a casino," said Alan Feldman, a spokesman for MGM Mirage.

Daley's announcement came two months after the Illinois Gaming Board awarded the state's 10th and final casino license to Isle of Capri Casinos, which bid $518 million.

Although the Isle of Capri was awarded the state's final casino license by the gaming board, Illinois Attorney General Lisa Madigan said Tuesday afternoon she would take back the permit because of the company's plans to built a casino in the Chicago suburb of Rosemont. Madigan has accused Rosemont of having connections to organized crime.

While most major casino operators weren't dismissing Daley's ideas on Tuesday, Feldman, who said his company isn't interested in running a downtown Chicago casino, suggested the mayor's plan raises some issues that wouldn't be found with a company-owned property.

"If an operator does something inappropriate, and it will cost a lot of money to fix it, what happens when the owner doesn't want to fix it?" he said. "How does the state fine itself if it does something wrong?"

Another casino executive, who did not want to be named, said Daley's move so soon after the recent awarding of a 10th Illinois gaming license illustrates how volatile the state's gaming market is. "You don't know when the tax rate or the number of licenses will change," he said.

Harrah's Entertainment, which offered $520 million for the gaming license so it could open a casino in the Chicago suburbs, said it's too early to say if the company would be interested in managing a city-owned casino in downtown Chicago.

"We don't know where the casino is going or what will be the requirements to manage the facility," said Gary Thompson, a Harrah's spokesman.

Caesars Entertainment, which was an early bidder for the 10th Illinois license, would not comment on Daley's proposal.

Illinois Gov. Rod Blagojevich said Tuesday he would veto any legislation to build a casino near downtown Chicago.

Blagojevich opposes Daley's plans because he said casinos were permitted in the state in part to "bring economic development to depressed areas," and that downtown Chicago isn't such an area, said Abby Attenhoff, a spokeswoman for the governor's office.

Several key legislative leaders, including Democratic Senate President Emil Jones and Rep. Lou Lang, head of the House Gaming Committee, said they would support Daley's plan.

Daley, who called the city-owned casino "a bold step," said the arrangement would better ensure that gaming profits go to taxpayers. He projected Chicago could get as much as $300 million a year and the state would get as much as $700 million a year.

The casino would employ about 2,500 people and create 1,500 new construction jobs.

If a Chicago casino is OK'd by the Illinois Legislature, despite Blagojevich's opposition, Feldman said he doesn't think the state will see a windfall by selling a management license.

"All a company is doing is running the concession for the state," he said. "A company's not going to tie up a lot of capital in that."

MGM Mirage did not bid on the final Illinois gaming license.

"The Illinois political environment is so negative, it would just not be a proper use of our shareholder's money," he said. "There are many, many other places where we might actually see a return on our investment."

Isle of Capri's also questioned some of Daley's rosy projections.

"It reminded me an awful lot of the projections for the New Orleans casino about 10 years ago," he said. "Based on their numbers, this would be one of the busiest, if not the busiest casino in the U.S."

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