Local casinos eye impact of Majestic bankruptcy

Could the bankruptcy filing of a major casino in Indiana affect what happens to the gambling industry in Illinois?

Some experts say Chicago-area casinos could see a bump in business since the Majestic Star Casino in Gary, Ind., filed bankruptcy this week. After all, devoted gamblers are eager to find the next best place.

But just because a business files bankruptcy, that doesn't mean it will close its doors, said Tom Swoik, executive director of the Illinois Casino Gaming Association in Springfield.

"It's a shame that's happening to them," said Swoik of Majestic. "But declaring bankruptcy doesn't mean they'll close. Someone could step in and pick them up. They may not have that much down time."

Majestic Star Casino LLC, which owns Majestic Star and Majestic Star II casinos and the Majestic Star Hotel in Gary, Ind., Fitzgerald's Tunica in Mississippi and Fitzgerald's Black Hawk in Colorado, filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in Wilmington, Del. Court papers said it was due to increasing competition and the recession's toll on consumer spending.

Those same factors have been affecting casinos around Illinois, said Gene O'Shea, spokesman for the Illinois Gaming Board.

According to the board's data, more people have visited casinos around Illinois, but the casinos still lost money during October, compared to October 2008. For example, The Hollywood Casino in Aurora receipts were $15.3 million, compared to $16.9 million in October 2008, or down nearly 10 percent. The Grand Victoria in Elgin saw a similar 10 percent drop, with receipts of $23.6 million in October, compared to $26.1 million for the same period last year.

Spokesmen for the Grand Victoria and Hollywood casinos did not return phone calls.

The only one in Illinois to have a dramatic jump in profit was Jumer's Casino and Hotel in Rock Island, which saw $6.4 million in October, compared to $2.5 million in October 2008, a 155 percent increase.

"It was rebuilt and reopened this year and that made a difference," said O'Shea.

The Majestic is only one casualty that is symptomatic of an economic downturn. But if the Majestic ceases operations, that could be a gain for other ares casinos that absorb the Majestic's clientele, said William Chin, a mathematics professor and specialist on gambling and games of chance at DePaul University in Chicago.

"People are tightening their belts," Chin said of the issues facing casinos. "Problem gambling is on the rise, especially among the lower-income gamblers. And for places like Vegas, there are fewer foreign visitors since 9/11, and more recently, the global economic crisis."