The battle for Illinois’ last riverboat casino license, which pitted big-money developers in a fierce competition that lasted more than a year, was settled in a 45-second roll-call vote Wednesday.
The Illinois Gaming Board voted 3-2 to award the 10th and-at least for now-last license to Elgin. The board favored the northwest suburb over nearby West Dundee, north suburban Antioch and Moline, which is on the Mississippi River in western Illinois.
Elgin appeared to win the competition on the basis of its need for economic revitalization-a key aim of the riverboat legislation. But the board would not go into detail regarding its decision.
When the decision was announced, the winners embraced euphorically while the losers graciously shuffled out of the James R. Thompson Center.
Many vowed to lobby the General Assembly and Gov. Jim Edgar for more riverboat gambling licenses, especially if boats are approved for Chicago.
“We’re thrilled,” said a beaming Nicholas Pritzker, head of Hyatt Development Corp., a partner in the Elgin boat.
Pritzker’s Hyatt, along with Nevada Landing, a Las Vegas casino and hotel company, are partners in the $53 million riverboat and entertainment complex to be built on the Fox River in downtown Elgin. In all, about 2,000 new jobs will be created.
The 19th Century-style, 135-foot-long boat, with the state-allowed maximum of 1,200 gambling positions, would be named Lady Elgin II, after a paddlewheel steamer that sank in 1860 in Lake Michigan. It would run half-mile cruises on the Fox River, which will have to be dredged to about 9 feet to accommodate the boat. The river is as shallow as 3 feet in places.
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The boat and the related movie theater and shopping complex are expected to pump more than $14 million into Elgin’s tax coffers and about $40 million into the state budget.
The enterprise would be the first gambling riverboat in the northwest suburbs, but the fifth boat in the Chicago metro area. Boats already are operating on the Fox River in Aurora and two locations on the Des Plaines River in Joliet.
Like the others, the Elgin boat is expected to turn hefty profits.
In July, the 10 boats already in operation (one license holder operates two) took in gross receipts of $62 million. The state’s share amounted to more than $10 million, and local governments received about $4 million in tax revenue.
With each new riverboat, the revenue take has only increased, allaying some fears that increased competition would diminish each boat’s share of the gambling pot. While the market may be bigger than anyone anticipated, the addition of the Elgin boat will be watched closely.
The huge profits realized by the first riverboats fueled the fierce competition for the 10th and last license permitted under the law passed in 1990. Two years ago, with riverboat gambling still an unproven moneymaker, few groups were willing to invest in a boat. The Gaming Board issued the nine other licenses with little fanfare.
Under the Elgin plan, developers have offered the city and Kane County a percentage of their profits, which they estimate would be about $15 million a year.
“The vote was on the merits of the economic development aspect of the plan and the needs of the city of Elgin,” Pritzker said.
Three years ago, the legislature approved riverboat gambling to promote economic development and tourism. Under the law, distressed areas were to be favored for riverboat licenses.
Downtown Elgin, which local officials characterized as a blighted area ravaged by suburban shopping malls, apparently best met that and other criteria in the eyes of the board majority. None of the board members, however, explained their votes in detail.
“The law asked us to give consideration in terms of a depressed area,” said board chairman Bill Kunkle, who was otherwise evasive about the board’s reasoning. “It was a difficult decision.”
Voting with Kunkle for Elgin were board members William Roberts and J. Thomas Johnson. Voting against were members Gayl S. Pyatt and Robert Vickrey.
Pyatt said she voted no because of concerns that the Elgin boat would cruise only about a half-mile. She questioned whether that constituted a cruise “as I think was intended by the legislation.”
Vickrey left the meeting before he could be questioned about his no vote.
Before emerging for the quick vote, the board deliberated for five hours in closed session.
On Monday, in a 10-hour public session, the board heard one last pitch from each of the contenders. Elgin and Moline officials vied for “most blighted” status in an effort to show their towns needed economic development the most.
At one point, in what appeared to be an act of political suicide, Elgin Mayor George Van De Voorde said the busiest business in his downtown is “the unemployment office.”
Wednesday, Van De Voorde was euphoric over the board’s decision.
“We were once the trading center for miles around, and then, with the coming of the malls, our downtown slowly but surely died,” he said. “Now we can see a light at the end of the tunnel.”
The Elgin boat will have to compete with two boats in Joliet and two in Aurora. And Chicago Mayor Richard Daley is pushing for legislation allowing up to five riverboats in Chicago.
But the prospect of competition did not discourage the investors behind the proposals for the last license.
“The vast bulk of our market is going to come from a drive time of 20 to 30 minutes away from Elgin and visitors coming to the northwest suburbs and O’Hare Airport,” Pritzker said. “Of course there will be some element of competition, but we’re used to it.”
Revenue estimates for the Elgin boat, which developers emphasized were conservative, nevertheless did not take into account possible competition from Chicago, Pritzker said.
Negotiations between Chicago and state officials could result not only in boats for Chicago, but for suburban or Downstate communities. All of Wednesday’s losers said they would consider getting involved in other riverboat plans if the law is broadened.
“We’ll be talking to the legislators about including Lake County if there is new legislation for riverboats in Illinois outside of Chicago,” said Glenn Seidenfeld Jr., the primary investor in the proposed Antioch boat.
“Anything is possible,” added Robert H. Baldwin, president of Mirage Resorts Inc. Mirage, a successful hotel casino company, had proposed an elaborate $93 million riverboat casino and hotel complex for the Fox River in West Dundee.
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For Mirage, the defeat was the second major blow in two years. The company reportedly spent $1 million in a failed attempt lobbying the Connecticut legislature to legalize casino gambling.
Mirage had secured a commitment from Arlington International Racecourse owner Richard Duchossois to invest in the West Dundee plan if it was licensed.
Duchossois, who lobbied intensely against riverboat gambling in 1990, surprised the horse-racing industry by backing one of the plans in exchange for a stake in the business.
Duchossois had little to say Wednesday about the board’s decision, even though it means a competing gambling entity less than 15 miles from his racetrack.
“It’s not the happiest moment of my life,” Duchossois said.
Other losers included environmental activists and riverboat opponents in Elgin. The gambling opponents had asked the board to postpone issuing the last license until residents could vote on whether they want gambling in their town. One week ago, activisits in Elgin and West Dundee had collected enough petitions for Nov. 2 referendums on the issue.