Frustrated with his inability to get a casino up and running in his town, Rosemont Mayor Donald Stephens is trying to jump-start the project by making it more lucrative for the state while slashing a big subsidy for the horse-racing industry that is linked to the riverboat.
Stephens said Wednesday he was “snookered” by racing lobbyists when he enlisted their help to pass a 1999 law authorizing the casino, even though he was a central figure in drafting the final deal.
Arlington Park Chairman Richard Duchossois and other racing interests first complained that the new casino would siphon off business, but then threw pivotal support behind it to secure legislative approval after the subsidy was added. Analysts now predict the subsidy would consume the lion’s share of state tax revenue generated by the riverboat.
With the project stalled by regulators and under fire from a growing range of politicians, Stephens said he only recently came to appreciate how bad the deal was for the state and vowed to lobby lawmakers to limit the projected $60 million annual stipend for the racing industry to about one-third that size.
If they don’t, Stephens said, he would seek to block construction of a project that has been his passion for years.
“The horse industry will get two times what the state gets, and that’s just not right,” Stephens said. “If this casino were getting ready to open in Rosemont with that on it, where the state gets [less than] half of what the horse-racing industry gets, they won’t open here because we’ll stop it. I’d go before the [Illinois] Gaming Board and ask them not to issue the license.”
Horse-racing industry representatives reacted to Stephens’ comments with a mixture of disbelief and outrage.
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Arlington Park spokesman Thom Serafin questioned why Stephens was taking his stand now, three years after the law’s passage.
“We’re befuddled by the whole thing,” he said. “The detailed analyses of the legislation and the numbers were all there in black and white. The fact that things haven’t gone the way he would have liked shouldn’t mean that the 40,000-plus people who work in the horse-racing industry should suffer and not be able to make a living.”
The Gaming Board rejected the proposed Emerald Casino’s bid for a Rosemont license last year, citing top casino officials for lying to state regulators and selling shares to investors with alleged mob ties.
Since then, Emerald Casino has appealed the ruling, Gov. George Ryan has replaced most of the board members who rejected the casino and the board’s new administrator is trying to broker a deal for its investors to sell out at a big profit to a Las Vegas casino company.
If a Rosemont casino is built, it is expected to almost instantly become the state’s most profitable riverboat. The bipartisan Illinois Economic and Fiscal Commission, an arm of the General Assembly, estimates that it would bring in $400 million a year in revenue, generating nearly $111 million in state taxes.
But under terms of the 1999 law, about $60 million of that would be shunted to a “horse racing equity fund” to be divvied up between racetracks and race prize money.
Under the formula approved for the subsidy, more tax revenue generated by the casino would go to horse racing than to the state. That has complicated recent efforts by casino proponents to rekindle interest in the project by selling it as a partial remedy for the state’s budget shortfall.
“The $60 million is going to private people,” Stephens said. “I have a problem with that. I think it’s wrong. It’s unconscionable. To end up with the state of Illinois getting half of what the racing industry gets out of the bill, I think it’s definitely wrong.”
Stephens maintained that he relied on the word of horse-racing lobbyists, who told him the subsidy would be no more than $25 million per year. “They snookered me,” he said.
Stephens aired those complaints when he met with Duchossois last week for lunch at a restaurant in Rosemont, according to a source familiar with the encounter.
Duchossois, the mayor said, had “bamboozled” him by underestimating how much horse racing stood to gain in the deal, the source said. Stephens said he wanted the subsidy capped, but Duchossois vehemently resisted, the source said.
The lunch quickly deteriorated into name-calling, and Scott Mordell, a top Duchossois aide who also was present, tried to stand up for his boss, the source said.
“You can’t talk to Mr. D. like that,” Mordell snapped at Stephens, according to the source.
“I can talk to him anyway I want,” Stephens shouted back, the source said.
Mordell and Duchossois stalked off without finishing their meals, the source said.
But Serafin said Duchossois denied that he had exchanged words with Stephens, saying the two had amicably “agreed to disagree.”
Others in the racing industry said they felt betrayed by Stephens after he used them to get the casino bill passed. Jim Carfagno, president of the Thoroughbred Industry of Illinois’ political action committee, said he had a hard time believing a savvy politician like Stephens misunderstood the legislation he was pushing.
The spat between Stephens and his former horse-racing allies only underscores how central players in the passage of the gambling law have turned on each other as support for the Rosemont casino has soured. Many have publicly traded accusations of double-dealing, deceptions and outright lies.
Casino critics said the accusations bolster their case against the project.
“The people who put the deal together are now admitting how bad it is,” said Rev. Tom Grey, an anti-gambling activist. “I can’t imagine that the people involved could have done more damage to their integrity and the confidence of the public.”