SCOTT CITY HEARS GAMBLING PROPOSALS

SCOTT CITY -- Two gambling firms interested in developing a Scott City site laid their cards on the table Thursday night at a special meeting of the city council.

After Scott City voters April 5 approved a local initiative to have riverboat gambling in the community, the council decided to move ahead with selection of an operator, despite state roadblocks thrown up by the failure of a state constitutional amendment the same day.

The Royal Casino Group of Calabasas, Calif., and Lady Luck Gaming Corporation of Las Vegas, Nev., modified their proposals in light of the failure of the amendment.

Thursday night was the first opportunity for the council and the citizens of Scott City to hear Royal Casino's proposition. Company representatives spent several days in Scott City prior to the April 5 election. But rather than tout their gambling proposal, they focused efforts on persuading voters to approve the local option on gambling.

At Thursday's meeting, it was a no-holds-barred contest between both companies to court the city council. On Monday, the council is expected to choose an operator for the city.

Jon F. Elliott, president and chief executive officer of Royal Casino Group Inc., presented a three-phase plan to the council, contingent on how the gambling issue shakes out in the Missouri legislature.

Elliott presented four possible sites for a riverboat in Scott City. All the sites already are either under option by the company or are in final negotiation stages, Elliott said.

One site was at the Southeast Missouri Regional Port Authority, which has been a bone of contention between Scott City and the Cape County Commission in recent weeks. Elliott told the council he has contacted the port authority board, and promises that if the port must be included in the deal, Scott City's share of the profits will remain the same.

But the site the company hopes to secure lies north of the city in the waters of the Diversion Channel.

Right now, state law prohibits a docked boat in the backwaters of the Mississippi River -- such as the Diversion Channel. But Elliott said he and other riverboat gambling operators are seeking a declaratory judgment on the interpretation of the law that might allow their plan to place the casino in the Diversion Channel.

Royal's riverboat, called the Royal Scott Casino, would be about the size of the original Alton Belle riverboat with 425-450 gambling positions. A small visitor center would accompany the boat in Phase II of the company's plan.

The facility would include a road leading to the boat, which Elliot said would reduce traffic on Nash Road or Scott City streets.

The total cost of the Scott City site would be about $10 million, Elliott said.

Royal Casinos has contacted an Alabama shipyard, which says it has a boat that could be converted and ready for gambling in about 120 days.

Contingent on the future passage of a constitutional amendment that would allow games of chance on riverboats, Elliott outlined a plan to develop a $32.5 million facility as a joint venture with Ameristar -- a national entertainment company.

"If we start small, we'll have the ability to expand," said Elliott. "We don't want to have a half-empty boat or a half-empty hotel."

Elliott said he doubted whether riverboat casinos could operate profitably without slot machines, which the Missouri Supreme Court has ruled are unconstitutional.

If the council accepts the $10 million Phase I proposal of Royal Casino Group, the company still will honor its promises for a sports complex to compensate for any shortfalls in area bingo games. The gambling firm also has promised a community center and library building.

"A boat is a movable asset," Elliott warned. "If you give your nod to someone else, and they ultimately leave the area, we won't come back. We will consider the market to be tainted.

"We want to do this right now," he said. "We want to stay."

Lady Luck pitched its proposal to the council for the third time in four weeks, but this time added hope of new sites and a promise to modify its facility to conform with state laws.

The company again focused on the port site, but officials said they have other sites in mind as well.

Michael Hlavsa, Lady Luck's chief financial officer, said he would discuss the alternative sites with the council in closed session, because, he claimed, the information should not be made public until a decision is made.

Lady Luck has proposed a three-phase, $63.2 million project in Scott City, which would include, among other things, a recreation area, a hotel and visitors area and a community center in the heart of Scott City.

Hlavsa acknowledged the failure of the constitutional amendment, but said the company will move ahead as planned.

"We believe it is not a question of if a state amendment passes, but rather a question of when it will pass," he said. "We have done a cost-estimate and believe that while it's not as profitable to have a boat without games of chance, it would be unwise not to develop a facility."