Casino news source: Chicago Business - http://www.chicagobusiness.com/
Developer ordered to sell Casino Queen stake
(AP) — Illinois gaming regulators have ordered the Casino Queen gambling boat to dump one of its smaller stakeholders, an owner of Kenny Construction Co. in Chicago, citing his ties to three men the panel said have “unsavory reputations.''
The Illinois Gaming Board, in a 5-0 vote Tuesday, gave privately owned Casino Queen Inc. 30 days to drop Gerard M. Kenny and his 2.857% stake in the riverboat operation or risk losing its gaming license, which is up for renewal in mid-2010.
Mr. Kenny resigned as an officer of Kenny Construction in February 2005. He remains a shareholder.
In its resolution Tuesday, the gaming board questioned Kenny's possible dealings with any of three men — Leonard M. Mercer Jr., Frank Leo and Patrick Danan — to buy and develop Chicago real estate.
The board termed Mercer a convicted felon and “known associate of organized crime.'' Mercer, identified in 1995 by New Jersey officials as an associate of a Philadelphia crime family, served nine months in prison in 1989 for bribing a Teamsters official to obtain a pension fund loan, according to various press reports.
Efforts to find a listed telephone number for Mercer on Tuesday were unsuccessful.
Leo is a Mercer associate, Tuesday's ruling read.
Kenny, an owner of Kenny Construction Co., said he disagreed with the gaming board's findings, among other things saying Mercer was never involved in the Chicago project. He also said Leo and Danan were vetted for that project and found to be acceptable.
“With those business partners I have full faith,'' Kenny said. “The allegations against them are vague, and thoroughly untrue.''
Kenny said he has no plans to divest his stake in the Casino Queen and would consider all options, including possible legal action against the board.
Calls to the Casino Queen's administrative office were directed to Ron O'Connor, a spokesman who declined public comment. “Nobody associated with the Casino Queen discusses any decision of the gaming board,'' he said.
During the board's investigation, according to Tuesday's ruling, Leo and Danan were associated with Mercer in various interests including Raceway Ventures LLC, formed in early 2004 to acquire a majority stake in a New York racetrack.
New York gambling investigations of Raceway's ownership, finances and the acquisition of stock in that business found that Mercer did not properly disclose his interest. Leo and Danan were denied licensure for failing to cooperate with New York investigators, Tuesday's ruling read.
In August 2004, the New York Racing and Wagering Board ordered that Raceway Ventures, Leo and Danan divest their stock and any other “beneficial'' interest in the racetrack. Thirteen months later, Kenny, Leo and Danan closed on their purchase of Chicago real estate.
Mercer, Leo and Danan “have notorious and/or unsavory reputations,'' according to Tuesday's resolution, adding that the conduct of Mercer, Leo and Danan during the New York investigation “discredits or tends to discredit the Illinois gambling industry and the state of Illinois.''
Given Kenny's associations with those men, the board found, “it is contrary to the public interest and the credibility of gaming in Illinois for Kenny to continue to hold any stock or interest in stock, directly or indirectly, in Casino Queen Inc.''
The Illinois board said it also noted that Kenny pledged his shares of stock in the Casino Queen — the St. Louis area's third-largest casino, with about $170 million in gambling revenue in 2005 — without first getting the board's approval.
Tuesday's action comes as construction presses on to make the Casino Queen, now moored along the Mississippi River, Illinois' first riverboat to be moved away from the river. The Casino Queen is to be moved to an inland moat on what is now a parking lot for the casino's 157-room hotel. The new casino is expected to open next year. |
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