The head of the investor group behind the Emerald Casino has all but given up on winning approval to operate in Rosemont. But Kevin Flynn said he will fight to prevent anyone else from gaining the rights to a new casino until his family is assured of a “fair return” on its investment.
In an interview with the Tribune, Flynn did not specify what he thought a fair return would be, but said he and relatives had put nearly $40 million into the project. Other investors added another $52 million, he and other shareholders said.
The Flynn family would have received about $240 million and the other investors would have split $215 million under a proposed buyout of the Emerald group touted by Illinois Gaming Board Administrator Philip Parenti but ultimately rejected by the panel in February.
“Just like I don’t like being at parties I’m not invited to, if the State of Illinois doesn’t want me to have a casino in this state, I’m not interested in having one,” Flynn said. “But we’ve had significant risk capital invested for many years, and a fair return is what we’re looking for.
“If we can’t find a middle ground, we will have to work to vindicate ourselves and our reputations in a court of law.”
That could happen soon. An appeal hearing on the Gaming Board’s decision last year to deny Emerald a casino license is to begin May 1, and a separate lawsuit on the license may be decided by the end of April.
The Flynn family controls nearly 53 percent of Emerald’s shares and can dictate whether to sell the company or to press on with a legal battle seeking to force the board permit construction of the casino.
That does not mean the investor group is solidly behind the Flynn leadership. Just under 20 percent of the shares are held by women and minority investors, who have complained that the Flynns have run the venture into the ground and should agree to sell at no profit to a casino venture acceptable to regulators.
“I’ve never seen such a display of greed and poor judgment in my life,” said Grayson Mitchell, a spokesman for the minority investor group that includes Walter Payton’s widow, Connie, and Chaz Ebert, wife of film critic Roger Ebert.
“They’re trying to milk every dime out of a deal they frankly don’t have any right to,” Mitchell said of the Flynns. “To be standing at the rail demanding profit is just audacious.”
The Flynns invested in the casino company in 1991, though at the time it had a different name and operated a casino near Galena that failed. But after an intensive lobbying drive orchestrated by the Flynns, Rosemont Mayor Donald Stephens and others, lawmakers rewrote state gambling law in 1999 to allow the renamed Emerald firm to revive its casino operations in Rosemont.
The relocation went awry last year when the Gaming Board found Flynn and his father, Donald, a former Waste Management executive, unsuitable for a casino license, alleging they repeatedly lied to casino regulators and sold shares to mob-connected investors.
Flynn has denied the allegations. He said Emerald had been singled out for punishment, noting that the board allowed Jack Binion to sell his Joliet Empress Casino for $475 million last year after he had been found unsuitable as an owner.
At the time, Gaming Board officials said they allowed the deal in part to keep a casino running in order to maintain its revenue and employees.
When Flynn was found unsuitable last year, he vowed to fight to the end. Flynn now expresses much less eagerness to attempt to overturn the state’s decision.
“A year ago that seemed more important,” he said. “I feel like somebody that’s been through the blender. I’m just ready to move on, for my family’s sake–not my dad, but for my wife and kids.”
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In a related development, Stephens and House Republican leader Lee Daniels clashed Wednesday over Rosemont’s effort to make a casino in the village more politically palatable and financially lucrative for the state. Under the 1999 law, a large chunk of the state’s share of casino revenue would be redirected to a subsidy for the horse racing industry. But Stephens wants to cap the amount of the subsidy, effectively reducing it.
Daniels told Stephens he would not support legislation to impose a cap because it has little support among lawmakers, an aide to Daniels said.
Even so, the measure passed a House committee on Wednesday on a straight party line vote, with Democrats supporting it and Republicans opposed. A vote by the full House, which is controlled by Democrats, was expected this week.
Horse racing leaders, including Arlington Park Chairman Richard Duchossois have objected to any limit on racing’s subsidy.
Stephens said he told Daniels, who is chairman of the Illinois Republican Party, “I think you guys are joined at the hip with Mr. Duchossois.” He characterized the current law as a “rip-off for the horse-racing industry” and said, “How can you permit that in good conscience when we’re talking about closing nursing homes and cutting funds for people that really need it?”