Gambling expansion efforts in Illinois appeared shaky Tuesday after Gov. Rod Blagojevich rejected Mayor Richard Daley’s plan for a city-owned casino and Atty. Gen. Lisa Madigan acted to scuttle the Illinois Gaming Board’s move to allow a casino in Rosemont.
A day after Daley asked lawmakers to let him open a huge casino near downtown, Blagojevich vowed to veto the legislation if it passed.
Blagojevich did not rule out possibly backing new suburban casino proposals. But his absolute opposition to Daley’s showcase initiative, combined with conditions he set for approval of more gambling elsewhere, may have rendered the passage of any gambling package politically difficult.
The fast-moving developments come against a backdrop of continued economic distress in both the state and city budgets that has set officials scrambling to find new sources of revenue to avoid tax increases or deep cuts in programs.
Blagojevich had once hoped to buttress next year’s budget with a quick infusion of at least $350 million from the sale of an unused riverboat license now held by the bankrupt Emerald Casino.
But Madigan made it clear she would fight the Gaming Board’s decision to award the new casino to Rosemont and that it could be years–if ever–before the state could get any money from that deal. She announced plans to reopen disciplinary hearings aimed at revoking Emerald’s license, which could block the deal allowing sale of the license to a Mississippi-based casino chain that wants to build in Rosemont.
Despite the governor’s challenge to the mayor’s plan, Senate President Emil Jones (D-Chicago) vowed to push forward with gambling legislation that would include casinos not only for Chicago, but also for the north and south suburbs and possibly Rockford.
But Blagojevich said he opposes any package that includes a Chicago casino, and he chastised lawmakers for looking to expand gambling to fill the state’s budget hole.
Building a casino in Chicago “prevents us from making the hard decisions that are necessary to continue to reform the system here in Springfield and get our fiscal house in order,” the governor said.
Blagojevich said he would keep an “open mind” about expanding gambling outside of Chicago, but only if lawmakers embrace his call for higher taxes and fees on businesses.
Ever since he was a candidate for governor, Blagojevich has given conflicting signals about gambling, at times appearing intrigued by expansion and at times declaring his flat opposition to it.
In fact, City Hall sources said Daley aides discussed the mayor’s plan with Blagojevich staffers at least twice last week and got noncommittal responses.
“We didn’t get a flat-out `no,’ [more] like `we’ll take it under advisement,'” said one mayoral aide in explaining why Daley unveiled his plan Monday. “We didn’t get anything definitive [from the governor’s office], and we could not wait forever.”
Daley flew to Paris on Tuesday but issued a statement expressing disappointment.
“Unfortunately, the governor announced his position before we had an opportunity to present our case and demonstrate the significant financial benefits [a casino] would provide to city and state taxpayers,” Daley said.
The mayor said Blagojevich has assured the city he will find more money for schools, parks and neighborhoods, though he didn’t explain how. The promise came in a phone call Blagojevich placed to Daley on Tuesday before the mayor left.
In explaining his decision at a Springfield press conference, Blagojevich said Illinois legalized gambling to give a shot in the arm to economically struggling river towns, and Chicago didn’t fit that definition.
“Once you change the underlying philosophy that governs gaming in Illinois, a philosophy of a limited number of riverboats in economically depressed areas, you have fundamentally changed the landscape of gaming in our state,” Blagojevich said. “… A mega-casino in Chicago is not a difference of degree. It’s a fundamental difference that speaks to the future of our state.”
In explaining why he was resisting Daley’s proposal and the money it promised, Blagojevich invoked a rambling metaphor likening himself to the mythological Greek hero Odysseus who had himself lashed to a ship mast to resist the song of the Sirens.
“He understands that song is very tempting, very enticing and very dangerous,” Blagojevich said. “… That happens to me sometimes. I have to fully confess that the idea of all this money could solve a lot of our problems. But it doesn’t seem right to me.”
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Only minutes after Blagojevich began speaking, Madigan announced her decision on the Emerald license in Chicago.
Madigan said reopening the Emerald disciplinary hearings would all but kill plans for Isle of Capri to complete its purchase of the license and build in Rosemont.
Madigan said she decided to “pull the plug” on a deal she struck earlier with Emerald because the Gaming Board had not adequately explained why it ignored staff recommendations and picked Isle of Capri over other bidders for the license. Madigan also said the board had failed to explain why it had become comfortable with Rosemont as a casino site despite questions about whether the suburb’s longtime mayor, Donald Stephens, has links to organized crime. Stephens has denied those allegations.
Madigan predicted Rosemont would fight her in court, possibly tying up the license for years. If lawmakers want a quick infusion of casino revenue, she said, they may want to deactivate the Emerald license and replace it with another.
“It is very clear to us at this point that the Illinois Gaming Board members failed in making sure that bidding procedures for this license were, in fact, fair,” Madigan said. “There are numerous questions that still remain to be answered that they have failed to answer. In addition, Rosemont has pursued a scorched-earth policy in terms of litigation and therefore this will not be ending any time soon.”
Emerald also had hoped to open in Rosemont, but in 2001 the Gaming Board denied permission as it accused company officials of lying to regulators and selling shares to investors with mob ties. The disciplinary hearings before an administrative law judge were begun in 2002 but were suspended when Emerald entered talks with the state about a deal to sell the license.
An attorney for Emerald expressed disappointment with Madigan’s position and said the firm had kept its side of the deal with the state.
Rosemont attorney Robert Stephenson said the village may ask a federal judge overseeing Emerald’s bankruptcy on Thursday to bar Madigan from interfering with the sale of the license to Isle of Capri.