Thursday, November 03, 2011

Liar, Liar: Ilitch using MotorCity Casino Jackpots to Fund Gambling Habits Outside Michigan; Pay-Off Las Vegas Casino Lords and Wall Street Fat Cats

Promises, Promises: Failed!
Both Marian Ilitch (she owns Detroit's MotorCity Casino) and Michael Malik (he was a MotorCity partner until he failed to get a Michigan gaming license in 1999) were behind the campaigns in the 1990s that asked Detroit voters to approve three Las Vegas-style commercial gambling halls. They promised Detroiters that approving gambling in Detroit would result in an economic windfall and help turn Detroit around. They said that casinos in Detroit would mean Detroit would capture gaming revenue instead of loosing it to Windsor or Las Vegas or elsewere.

Ilitch/Malik and the Detroit-based founders of MotorCity Casino told Detroiters that giving their enterprise the right to develop and operate one of three commercial casinos in Detroit meant keeping gambling revenue in Detroit.

And when Marian Ilitch took control of MotorCity Casino from Las Vegas-based Mirage Resorts in 2005, Ilitch spokespersons and MotorCity ad campaigns implied that Detroit-owned meant MotorCity Casino would uniquely be inclined to keep casino money in Detroit; that somehow Marian Ilitch would see the money stayed in Detroit.

Rich Got Richer, Not Detroit
Really? Casino doors have been open for ten years and yet Forbes just ranked Detroit as the #1 Most Dangerous City in America. Last month MotorCity Casino workers were told to start paying their own health care costs or face job loses. And since opening MotorCity Casino, Ilitch and Malik have made a habit out of chasing failed casino schemes in New York, California and Hawaii funded by Detroit casino money.

So yeah, Detroit money stayed in Detroit. Some small part of it... in the bank accounts of people named Ilitch and Malik.  Forbes says Mike & Marian Ilitch are now worth $2 billion; and last year Mike Malik dropped $300,000 on a Las Vegas wedding that lasted one month and bought a $5.4 million New York City (Central Park West) Penthouse.  But last month they told MotorCity Casino workers to start paying their own health care costs.

Truth is, the millions people are leaving on the gaming table and in the bellies of slot machines at MotorCity Casino aren't even staying in Michigan.

Truth is MotorCity Casino Making Las Vegas, Foreign Banks & Walls Street Fat Cats Richer
First, Marian Ilitch's 2005 acquisition of MotorCity Casino's controlling shares and the subsequent casino renovation/expansion that followed, came at a big price; hundreds of millions in fact that Marian Ilitch borrowed from out of state banks and Wall Street. And right now it's costing Detroit.  She's financing MotorCity Casino on the backs of Detroit's taxpayers.

If MotorCity Casino wasn't so highly leveraged or had stayed true to its original financial projections and the economic studies they used to sell voters on gambling halls in the 1990s, maybe MotorCity Casino workers wouldn't have been told this last month to start paying their own health care costs or face losing their jobs.

Yes, Marian Ilitch did pony up some family cash to fund a small portion of the buyout and expansion, but in truth, she paid for her business decisions, in most part, with hundreds of millions borrowed by leveraging Ilitch assets and future MotorCity Casino earnings to attract investments from foreign banks and Wall Street. And because some of the investment "opportunities" were so risky they are rated as "junk bonds," Ilitch is paying higher interest terms.

Today, millions in cash Detroiters are leaving on the gaming tables and in the slot machines at MotorCity Casino flow directly to pay off Las Vegas casino interests, foreign banks and Wall Street fat cats.

If that wasn't bad enough, a big chunk of the millions Ilitch is raking in at MotorCity Casino have been spent attempting to expand the Ilitch gambling empire outside of Michigan -- to fund failed Ilitch/Malik ego projects.

MotorCity Casino Funding Failed Schemes to Expand Ilitch Gambling Empire Outside of Michigan
Yes, since opening the doors of MotorCity Casino, Ilitch and Malik have spent millions chasing prestige casino schemes outside of Detroit -- way outside, in New York, California and Hawaii.

As an example, here's a rough accounting of the millions the Detroiters have spent chasing just their New York City / Belmont Race Track casino dreams:

  • $25 million to acquire the exclusive rights to develop, manage and operate a casino
  • $5.4 million to purchase a NYC Penthouse
  • $2.3 million to D.C. Lobbyists
  • $1.5 million to Albany Lobbyists
  • $1.5 million to Political Campaign Committees

That's more than $35 million and just what's been disclosed or which they are forced to disclose. Most of what goes on at Ilitch Holdings is kept secret and under wraps. For a decade, they've certainly incurred other expenses. Consider millions spent during the last decade:  flying a private jet back and forth to New York several times a week; paying attorneys and public relations and advertising execs in Lansing, Detroit, D.C., Albany and New York City; keeping the leaders of the Shinnecock Indian Nation in toe; and so on.

Shame, Shame!
Shame on Marian Ilitch and Mike Malik for promising they'd keep the gambling money in Detroit. Shame on them for suggesting to fellow Detroiters that if they were allowed to operate a gambling hall in the Motor City somehow Detroit would be a better place to live. Seems like the moment MotorCity Casino opened its doors, Marian Ilitch and Michael Malik forgot the promises they made to Detroit and they've never regretted their lies and misrepresentations.

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Ilitch has backed loosing sports teams and pizza, but casinos in Detroit? 10.09.06 ● Marian Ilitch #1 on "25 Most Powerful People" to Watch 2006” global gaming business o1.oo.o5 ● My Kingdom for a Casino Forbes 05.08.06 ● Big Lagoon’s casino dream awakens north coast journal 07.28.05 ● Shinnecocks launch legal claim to Hamptons land 06.16.05 ● Ilitch Plans to Expand Casino Empire 07.05.05 ● Ilitch outbids partners 04.14.05 ● Ilitch enmeshed in NY casino dispute 03.20.05 ● Marian Ilitch, high roller 03.20.05 ● MGM Mirage to Decide on Offer for Casino in Detroit 04.16.05 ● Secret deal for MotorCity alleged 02.15.05 ● Los Coyotes get new developer 02.08.05 Detroit casino figure to finance Barstow project 07.07.03 ● Indian Band trying to put casino in Barstow 06.04.03 Pizza matriarch takes on casino roles 10.23.02 ● Vanderbilt gets short straw in negotiations for a casino Lansing Journal 10.06.02 ● Indians aim to drive family from tribe in vicious dispute san diego union tribune 04.09.00 ●Malik owns 2000 Michigan Quarter Horse of the Year 01.01.00 ● Detroit Team to run Michigan’s newest Indian casino 05.23.99 Tiger ties tangle Marian Ilitch 04.29.99 ● Three investors must sell their Detroit casino interests 04.25.99 ● Partners’ cash revived election; They say money was crucial to Prop-E 04.25.99 Investors have troubled histories las vegas review journal 04.27.99 ● Investor served probation for domestic assault on 12 year old boy 04.25.99 Can a pair win a jackpot?: local men hope to... 03.17.97

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