Illinois state process underway in selection of Waukegan casino developer

by Administrator
in Casino

Investigations into the three would-be casino developers selected by the Waukegan City Council are underway, an Illinois Gaming Board spokesman said.

The Illinois Gaming Board has a year from when the applications were submitted to issue a license, according to the statute. If it doesn’t meet that deadline, it has to provide a written explanation to the applicant and inform them on when it “reasonably expects to make a determination.”

How long the due diligence takes depends on whether the would-be developers are already licensed with the state and how well they put together their application, said Gene O’Shea, a spokesman for the Illinois Gaming Board and the director of its self-exclusion program for problem gamblers. The investigations can take longer if the applications, for example, are incomplete and staff needs to request more information.

The companies behind the proposed Rivers Casino Waukegan, for example, are already licensed casino operators in Illinois. One of the principals for the North Point Casino bid also owns Tap Room Gaming, a video gambling machine operator also licensed by the state.

The third proposal, Full House Resort’s American Place, does not have any gambling ties to Illinois but operates five casinos in the U.S., according to its website.

The board can choose to give the license to the applicant that has the highest license bid, but it can also take into consideration “the character, reputation, experience and financial integrity” of the applicants, the proposed facilities, overall revenue figures, the potential financial benefits to other communities and the diversity of the would-be owners, according to the statute.

If the board doesn’t go with the applicant with the highest license bid, the state law requires it to issue a written decision explaining why.

Charles Johnson, the principal of Johnson Consulting, the outside firm hired by the city of Waukegan to help vet the would-be developers, told the Waukegan City Council that the state would probably come back with a ranking of the bidders.

The city would then enter into negotiations with the bidders to draft a development agreement, he said.

A potential wrinkle in this process is a pending lawsuit filed by Waukegan Potawatomi Casino, LLC, the one would-be casino developer spurned by the Waukegan City Council.

Potawatomi’s lawsuit argues that Johnson’s report contained inaccurate information and used a flawed process to rank the development proposals, and that the city violated the Open Meetings Act by not allowing public comment at the special meeting where it voted on the proposals.

Potawatomi is seeking to have the three certificates approved by the Waukegan City Council invalidated and to have the city start its selection process over, spokesman George Ermert said.

The next court date is scheduled for Jan. 24.

Ermert said Potawatomi has not sought an expedited hearing process, noting that it will be “quite some time” before Illinois Gaming Board finishes its process.

Another lawsuit focused on a claim by Waukegan Gaming LLC – which had reached a deal with the developers behind the Rivers Casino Waukegan proposal – that it had the exclusive right to build a casino in Waukegan was jointly dismissed by the company and the city.

The lawsuit became moot once the Waukegan City Council voted to recommend Rivers Casino Waukegan along with two other would-be developers to the Illinois Gaming Board, city attorney Bob Long.

The thought is “that if they do get the license from (Illinois Gaming Board), their exclusive contract is meaningless since we'll never get a second license anyway,” Long said in an email. “And if they don't get it, they wouldn't qualify to exercise those exclusive rights under the terms of the contract anyway.”

If something changes, both sides have reserved the right to sue again, he said.