Saturday, November 29, 2008

Ilitch granted exception so family's Olympia Entertainment can be leveraged to benefit her casino


Ilitch casino gets exemption
State says Olympia Entertainment can book acts

By Daniel Duggan

Marian Ilitch has won an exemption from the Michigan Gaming Board and now can use Ilitch-owned Olympia Entertainment to do bookings for the new theater at MotorCity Casino, despite a law prohibiting casinos from using vendors in which they have an ownership interest.

Negotiations on the exemption began before the theater was completed in September and, as a result, only two shows have been booked at the 1,886-seat theater since, both under special one-time-use exemptions.

The gaming board's executive director issued a one-year exemption to the casino Nov. 7, saying the arrangement doesn't “harm the integrity of gaming” in Michigan.

Using Olympia Entertainment is a crucial part of the business plan for the new theater, Sound Board, so that bookings for performers at the casino can be made in conjunction with Comerica Park, the Fox Theatre and shows at other venues booked by Olympia Entertainment, said MotorCity COO Rhonda Cohen.

“Being able to leverage acts with the other Olympia Entertainment venues gives us access to better acts,” Cohen said.

When it comes to Michigan casino owners using vendors they also own, a measure of control is needed, said Richard Kalm, executive director of the gaming board. The spirit of the law is to ensure that a casino company doesn't take over all the vending companies in the area and create a monopoly, he said.

“And we're always worried about organized crime and theft,” Kalm said. “So, entities have to be kept separate.”

In evaluating the case with Ilitch Holdings, Kalm said there is no apparent concern from a gaming standpoint.

“In dealing with Marian Ilitch and Ilitch Holdings, we've never had any problems with them, and they've been perfect in reporting to us,” he said. “But you have to look at these issues carefully.”

Kalm has sole discretion to grant such an exemption to a company as long as it “preserves the integrity of gaming and protects the public.”

Several conditions apply to the exemption. The casino is required to issue quarterly reports on activities with Olympia, and the deal is subject to annual re-approval.

A similar exemption was granted to MGM Grand Detroit Casino because the Las Vegas-based gaming company MGM Mirage (NYSE: MGM) — which owns an interest in the Detroit operation — also owns a travel agency in Las Vegas, which is used to bring guests to Detroit, Kalm said.

Exemptions also have been issued in the past for Olympia so that all three casinos can purchase luxury boxes for sporting events and buy season tickets.

Daniel Duggan: (313) 446-0414,

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