clock menu more-arrow no yes

Filed under:

Rivers Casino pays $1.65M after mob inquiry

The Rivers Casino opening in 2011 | Sun-Times file photo

Rivers Casino has paid one of the largest gaming-related fines in modern times — $1.65 million — following an Illinois Gaming Board investigation spurred in part by questions over a security and maintenance contractor’s ties to reputed mob figures.

Last year, the Better Government Association discovered that Rivers — Illinois’ newest and most lucrative casino — hired United Service Cos. for security and cleaning work at the Des Plaines gaming site.

United is run by Richard “Rick” Simon, who has had admitted business and personal ties to reputed mob figures, including his late friend and boss, Ben Stein. Simon made news earlier in the week after the Sun-Times and BGA reported that a firm headed by former Chicago Police Supt. Garry McCarthy was working with one of Simon’s companies.

The BGA asked Rivers officials last May about United’s hiring because Illinois casinos are not supposed to have even a hint of organized crime connections – something that helped sink Rosemont’s years-long push to score a gaming license.

The gaming board, which regulates casinos and video gaming in Illinois, can penalize gaming license holders for anything that “would discredit or tend to discredit the Illinois Gaming industry,” including “employing persons of notorious or unsavory reputation,” according to state rules.

Rivers officials said at the time they hadn’t known about Simon’s background – even though it had been documented for years in news reports – and then notified the gaming board about United’s work for Rivers. The gaming board started a probe, which was later combined with another investigation into problems with patron promotions at Rivers.

In August, the gaming board proposed a $2 million fine against Rivers, though the regulators didn’t directly take the casino to task for hiring United.

Instead, the gaming board slammed Rivers for the way Simon’s company was hired – without competitive bids and, in some instances, even a formal contract, in violation of procurement protocols that are supposed to ensure the integrity of casino operations, according to the state agency’s disciplinary complaint.

The gaming board also raised regulatory issues with Rivers unrelated to United. For instance, the casino was accused of allowing patrons to enter a “$250,000 Sign Up and Win New Member Giveaway” after the promotional period had ended.

Rivers entered into settlement talks with the gaming board and an agreement was reached in late January and early February to pay $1.65 million, according to the settlement agreement.

A spokesman for Rivers and Neil Bluhm, chairman of the venture that owns Rivers, wouldn’t comment other than to say the fine has been paid and “United Services is no longer a vendor.”

Simon declined to comment.

Don Tracy, chairman of the gaming board, said “I think it was a fair settlement,” and the fine was “the biggest one in my tenure.”

Tracy was appointed to the post last year by Gov. Bruce Rauner, though he has yet to be confirmed by the Illinois Senate.

More than a decade ago, Elgin’s Grand Victoria Casino was accused of hiring a contractor with reputed mob ties and hit with a proposed $7.2 million fine by the gaming board. Grand Victoria and the agency later settled on a $3.2 million payment.

As for Rivers, it was “responsible about it, they didn’t duck the issues, they started negotiating right away, they cooperated,” Tracy said.

The settlement agreement says the gaming board “acknowledges that all issues alleged in the Complaint were discovered and self-reported by Rivers.” Yet, Rivers only reported the United hiring after the BGA contacted the casino while reporting a news story.

This story was written and reported by the Better Government Association’s Robert Herguth, who can be reached at rherguth@bettergov.org.