Temporary casino opening could be delayed

MGM Grand's $200 million temporary casino had expected to be the first of three casinos to get state approval. But last week, the Michigan Gaming Control Board refused a request by MGM Detroit's temporary casino landlord - Lodge/Abbott Associates - that it be exempt from casino-supplier licensing.

It's unlikely the gaming board will allow any temporary casino to open until its major suppliers, who could include landlords, are licensed, The Detroit News reported Tuesday.

The gaming board's refusal to grant Lodge/Abbott the exemption means everyone with an interest in that company - including Detroit entrepreneur Anthony Soave - must submit to a rigorous background check.

The News has reported that Soave, a Grosse Pointe Farms resident and majority owner of the building that will house MGM's temporary casino, once was arrested on a gambling charge - eventually dismissed - and had contacts with reputed mobsters.

Soave, who made millions in the trash-hauling business, has an interest in the building through a trust he established for his daughters.

Gaming-license hopefuls must pass exhaustive state investigations of their integrity, moral character and reputation, personal and business honesty and financial wherewithal.

The time needed to conduct such an investigation of Lodge/Abbott could interfere with MGM's plan to open in late July - if MGM, its local investors and suppliers secure state approval. Past background probes of key casino investors have been lengthy.

Tom Fallucca, a lawyer for Lodge/Abbott, said his client will apply for a supplier license but may appeal the board's decision regarding the exemption.

To Fallucca, landlords don't fit the definition of "casino suppliers" - companies that sell gambling items to casinos or non-gaming companies that have contracts worth more than $200,000 in a 12-month period.

The lease with MGM Grand calls for fixed monthly payments - not payments based on profits, he said.

"We're not really a supplier of goods and services," Fallucca said. "Lodge/Abbott has no control over the operations of MGM's casino."

The state continues to push back its tentative dates for public hearings on the three groups that have applied for state casino licenses. State officials estimate those hearings will be held late next month, meaning MGM would have only a month's wiggle room before its hoped-for July opening.

Workers have been converting the former IRS building into MGM's temporary gambling hall, which will house its operations until a permanent casino is opened in about four years.

The gaming board can grant exemptions to suppliers - such as law firms, insurance companies and real estate agents - regulated by other state agencies.

But companies must convince the board that they do not need to be licensed. Some did not present adequate evidence for an exemption, Nelson Westrin, the gaming control board's executive director, told the News.

John Redmond, president of MGM Grand's Primadonna Resorts, said all of the company's contracts include a provision requiring unlicensable applicants to step aside. He said any licensing problems of individual investors or businesses should not delay the temporary casino.

The other two groups chosen by Mayor Dennis Archer - Atwater/Circus Circus and the Greektown Casino group - also are awaiting state licensing and hope to open temporary casinos this year.

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