Published March 25, 2002

For all the insiders who are squabbling and scheming over a proposed casino in suburban Rosemont, it was a frantic weekend of calculating what to do next.

On Friday, the Illinois Gaming Board disclosed that it has rejected a deal by which MGM Mirage Inc. of Las Vegas would buy out the hapless Emerald Casino project for $615 million. That remarkably awful deal would have sent a paltry $160 million of the sale proceeds to the State of Illinois--and would have vastly enriched Emerald officials who allegedly lied time after time to Gaming Board investigators and sold shares to investors who have mob ties.

The Gaming Board didn't fully explain its decision to kill the deal. Like everything else having to do with the casino project, that made some people mad and other people madder.

Many of Emerald's investors are furious that, 14 months ago, the Gaming Board said Emerald's alleged lies and mob connections made the company unfit to open a casino. To the investors, the recent MGM Mirage offer was a godsend: They could walk away from their floundering casino project with millions of dollars in unearned profits. As cheap penance, they would send $160 million in chump change to the State of Illinois to make clueless taxpayers think they were getting a swell cut of the action.

What the Emerald investors truly deserve is . . . nothing. They put money into a casino project that hasn't succeeded, allegedly because of shady actions by key company officials.

The Tribune has supported a more generous exit: letting MGM Mirage buy out Emerald and then giving Emerald's investors the $49 million they put up in the first place, in return for their dropping all of their legal efforts to open a casino. Significantly, a group of minority Emerald investors has made a similar money-back proposal. After various expenses, the state would get not $160 million, but about $500 million. That would give the profit from the sale of Emerald to the people who deserve it: the taxpayers of Illinois who ultimately issue licenses for casinos.

But the Gaming Board now appears to be striking out in some new direction. The decision announced Friday suggests that the board wants to invite suitors other than MGM Mirage into these casino games. That, predictably, angers MGM Mirage, which thought it had an exclusive right to buy out Emerald. Give this a few more days and there will be so many lawsuits flying that plaintiffs will be running out of defendants.

There may still be time for a relatively simple conclusion. It should be clear to the key Emerald investors that they're in an increasingly tight corner--especially with the U.S. attorney's office now deconstructing Emerald's dealings. The investors' best strategy is to say they'll settle for getting their original $49 million back if the Gaming Board will reverse its Friday decision and let them complete the $615 million sale of Emerald to MGM Mirage. The deal could be structured to make all of the fast-spreading legal actions vanish--and clear the way for a respected company to open a casino in Cook County.

As is, Emerald risks losing everything if the courts don't force the Gaming Board to let the company open a casino. With Emerald out of the way, a change of law would let Illinois auction off the license--and keep all the proceeds. Given that a license is now worth $615 million on the open market, settling for chump change today would be just as foolish as permitting the Emerald investors to earn even one penny of profit.

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