SCOTT CITY CHOOSES GAMBLING COMPANY

SCOTT CITY -- After a long weekend of weighing proposals from two companies interested in developing a riverboat gambling operation in Scott City, its city council Monday night gave the nod to Lady Luck Gaming Corp.

Immediately following the council's unanimous approval of Lady Luck's $63.2 million bid, Gary Heisel, project coordinator for the company, said it would move promptly in applying for a license from the state gaming commission.

Its competition, the Royal Casino Group of Calabasas, Calif., was complimented by council members for its efforts and interest in the city. Royal Casinos put forth a $10 million initial plan, put promised a $32.5 million development should a state constitutional amendment be passed allowing games of chance on board.

"We realize both Royal and Lady Luck have spent many hours and dollars in our community helping us achieve our goal," said Ward 2 Councilman John Rogers Jr., chairman of the city's gambling committee. "For this our council and our city will be forever grateful.

"We have tried to be fair and make the best decision for the people of Scott City," he said.

Richard Steele, a Cape Girardeau attorney who represents Lady Luck locally, told the council he and the company look forward to having a close working relationship with Scott City.

"Meanwhile, it's time for us to get down to work," he said. "We want to start construction as soon as possible."

Lady Luck's originally proposed site was at the Southeast Missouri Regional Port. But Heisel said the company will apply for a license for a boat docking site on the Diversion Channel just east of Rhodes Travel Center off Nash Road. The site is two-and-one-half miles west of the Mississippi.

"One of the first things we're going to do is hire a local engineer to get the project under way," said Heisel. "We have a meeting next week with the (Southeast Missouri Regional Port Authority) and then a meeting with the Little River Drainage District to discuss some of the details of the project."

But even if the company gets a nod from the port and the river district that regulates the channel, it must contend with the state courts for a ruling on whether the Diversion Channel can be considered part of the Mississippi River.

Missouri statues say riverboats must be cruising vessels and can only travel the waters of the Mississippi or Missouri rivers. Lady Luck intends to seek a declaratory judgment on the law in hopes that the Diversion Channel can be classified as part of the river itself.

Jon F. Elliott, president and chief executive officer of the Royal Casino Group, does not think that will happen.

"We contacted the state gaming commission today and asked specifically about the feasibility of putting a boat that far up the Diversion Channel," he said. "They said they did not feel it was allowable. That basically means that Lady Luck's proposal did not conform to current Missouri law, as the council asked it to."

Elliott objected Saturday when the gambling committee allowed Lady Luck to present its "truck stop casino" plan, as he called it. He said Scott City Mayor Larry Forhan told both companies that final proposals had to be presented at a meeting held April 21. Elliott contended his company had submitted a final proposal and felt slighted by the committee allowing Lady Luck to amend its proposal.

The Royal Casino Group had optioned a parcel of land northeast of Scott City at the mouth of the Diversion Channel. The land would have allowed the company to place a boat in the Diversion Channel or in the Mississippi.

"This was a big disappointment to us," said Elliott after the council's vote. "This was going to be the number one project in our company.

"We have been treated very well by everyone in this community," he said. "We thought we presented a plan good enough to win. Obviously, it didn't."

Forhan said the gambling committee and the council as a whole used a "grading system" to choose its operator.

"The committee considered many factors before making its decision," he said. "Points were totaled and we ended up with a winner. It took a lot of the emotion out of the process."

The mayor said that since the city has chosen an operator, he hopes plans can move ahead quickly.

"Now that the decision-making process is behind us, we have to look to the future," he said.