A Pennsylvania-based casino firm contends its unusual bid for Illinois’ 10th gambling license could net the state up to $4 billion over the next decade and generate more than $2 billion in upfront money as the Blagojevich administration struggles to cope with a budget crisis.
Penn National Gaming, which owns Hollywood Casino in Aurora, said Friday that it is willing to pay $506 million for the rights to build a new $255 million casino and hotel in Rosemont. The company would then turn the facility over to the state in exchange for management rights for 20 years at an annual fee of about $40 million.
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Under the arrangement, the state would net a sure $350 million in the coming months, the exact amount the governor had planned on in his budget for this year.
But Penn National, which bid about $200 million more than any of the other six competitors for the license, also said the state could use its offer to employ creative financing to quickly secure a large pool of cash. As part of its bid, Penn National suggests that Illinois essentially sell the rights to several years of expected casino revenues.
Such a deal, the company estimated, could reap more than $2 billion for the state–about the size of the budget deficit Gov. Rod Blagojevich is now struggling to overcome.
Penn National chose to announce the details of its bid after published reports disclosed parts of the proposal on Friday, said Cezar Froelich, legal counsel for the company.
The company’s bid for the license, the rights to which are now held by bankrupt Emerald Casino, includes a provision to pay $156 million to investors and creditors, including $45 million for Rosemont to cover the cost of a casino parking garage the suburb built for Emerald.
Under the proposal, Penn National would sell the facility to the state for $1. Penn National would then be given a manager’s license for 10 percent of the gross revenue of the casino and be allowed to operate it for the state.
It is unclear whether Penn National’s proposal would pass legal muster or follow rules in bidding procedures for the Emerald license.
In addition to Penn National, two other casino firms bidding for the license are seeking to build in Rosemont. The others hope to locate in either Country Club Hills, Des Plaines, Summit or Waukegan.