Cape Girardeau man still hoping for casino license

Monday, September 21, 2009

A gambling license is a scarce commodity in Missouri now that voters agreed to limit the number of casinos to 13. But that isn't stopping dreamers, including David Knight of Cape Girardeau, from keeping their hopes alive that they may find a way to secure one of those rare items.

Those hopes became a little brighter last month when the Missouri Gaming Commission ruled that the license for the President Casino, operated by Pinnacle Entertainment in the old Admiral riverboat on the St. Louis waterfront, isn't transferrable.

Pinnacle asked the commission for the right to replace the boat with a new facility built on a barge. The company has also floated the idea of moving the new gambling facility to a site near the Chain of Rocks Bridge in St. Louis.

Both of those ideas are unacceptable, the commission ruled. A license is for a site and a facility and the location may not be changed and the facility may not be replaced without a new license application. The commission hasn't decided whether to award that license through an open process allowing for competition among potential sites or by giving priority to the incumbent operator.

"The commission has determined it would take a new license for a new facility and that is where the commission's actions stop," said LeAnn McCarthy, spokeswoman for the gaming commission.

Because the process remains undefined, at least three groups are hoping they can persuade the gaming commission to grant them the available license. They are:

* Knight and his Cape Girardeau partner Jim Riley. Knight, owner of Ole Hickory Pits, and Riley, owner of Red Letter Communications, own or have under option land along North Main Street for a project they call DREAMbig LLC. The 20-acre development idea includes a casino, hotel and 4,400-seat entertainment complex. Knight was on the verge of making initial applications to the commission last year when Proposition A, which set the license limit, was approved for the ballot and the commission ended all consideration of new licenses.

* North County Development LLC, which is undergoing the plan approval process in St. Louis County for a 377-acre development just south of the Columbia Bottoms Conservation Area at the confluence of the Missouri and Mississippi Rivers. The St. Louis County Planning Commission has approved the plan, which needs to overcome several more regulatory hurdles before construction would be allowed.

* Sugar Creek, Mo., in eastern Jackson County, near Kansas City, which was in the preliminary stages of seeking a license when the moratorium was imposed.

None of the proposed developments have announced a casino partner. Knight said last week that he has been talking with out-of-state casino operators to be ready if an open license is offered for competition.

"There is a limit to how much of that I can talk about," Knight said. "However, we are aware of the situation and it is our contention that Cape Girardeau would be the logical place for the license to be."

Knight does have some ammunition on that point. A study conducted last year concluded that most markets where casinos are already operating are near saturation and new casinos would likely split the take, not increase it, from gamblers. But a casino in Cape Girardeau was shown to have some of the best potential for increasing the overall take to the casino companies or the state.

Knight fought Proposition A in the courts to keep the limit off the number of licenses. He said he doesn't want to refight that battle, but expects the commission to consider locations outside the big metropolitan areas when the President's license becomes available.

"I will take the issue as presented at the present time by the gaming commission and work productively with them on the portability of the license or according to the law if a license is taken away by whatever means that it would be open to be moved and that if that is in fact the case then Cape Girardeau is the logical place," Knight said.

Along with the President's license, there are two other paths that could make a license available. The Missouri Legislature could pass a bill changing the limit to 14, 15 or more. A license could also become available if a current boat anywhere in the state is closed because of economic conditions.

The developers in St. Louis County don't see the lack of an available license today as a block to their plans, said Edward Griesedieck, the attorney who has served as a spokesman for the developers. Increasing the number of licenses through legislative action isn't out of the question, Griesedieck said. Reports from the American Gaming Association show Missouri's gambling industry is the fastest-growing in the country, he said.

"We just watched the legislature and it was a common theme that both the Missouri Gaming Commission and certain legislators thought it would be a good idea so they could produce additional revenue," Griesedieck said.

But House Majority Leader Steve Tilley, R-Perryville, said he doesn't see any chance of lawmakers changing the law enacted by voter approval.

"I can tell you, expanding that cap in the legislature is not only not likely, it is near impossible," Tilley said.

And two other Southeast Missouri lawmakers, veteran Sen. Jason Crowell, R-Cape Girardeau, and freshman Rep. Clint Tracy, R-Cape Girardeau, both indicated that they would not be willing to increase the cap.

The Missouri Gaming Association, which represents the casino operators, hasn't taken a stand on either a change in the number of licenses nor on how the process of awarding the President's license should be handled, said Mike Winter, executive director of the association.

Winter noted that the association supported all aspects of Proposition A. And it is too early to take a stand on the commission's process, he said. "This is still kind of unfolding, obviously," Winter said.

Tilley said he expects an open competition. "I would think every proposal would be considered based on what is best for the state," he said.

Crowell said he doesn't want to inject a political viewpoint into the commission's process because the commission is designed to keep politics out of the casino industry as much as possible. "I am not going to tell you what is fair and not fair," Crowell said. "We have a gaming commission that is going to do that and that is better than coming to the General Assembly and letting 197 politicians determine what is fair."

When the time comes for competition, Knight will be ready. And his argument will include a pitch to bring gambling to locations away from the Interstate 70 corridor, where all but three casinos are operating.

"The problem we have here is that the riverboat gambling thing has gone astray from its original mission, which was to spread tourism throughout the state adjacent to the Mississippi and Missouri rivers," he said.

rkeller@semissourian.com

388-3642

Pertinent Addresses:

333 N. Main St., Cape Girardeau, Mo.

801 Strodtman Rd., St. Louis, Mo.

Map of pertinent addresses

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