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Things were also looking up for Connelly, who, in early 1991, bought back the Admiral from the investors for $4 million.
He had already opened the President Casino in Davenport, Iowa, and by late 1991 it was garnering rave reviews as the country's first and largest floating gambling boat. Along with three other casinos in the area, the President added more than $1 million to Iowa's state coffers in the first two months of operation.
In addition to the Admiral and the President (which was originally moored in St. Louis), Connelly also owned eight other boats in Pittsburgh; one under construction in Louisiana; another boat to open in Biloxi, Miss.; hotels in Davenport and Pittsburgh; and the Belle of St. Louis, the Tom Sawyer, the Huck Finn, the Becky Thatcher and the Robert E. Lee on the St. Louis waterfront.
Connelly's ownership of the St. Louis boats wasn't coincidental. He had already poured big money into lobbying the Missouri Legislature to pass a bill allowing the November referendum and was, by mid-1992, spending even more -- about $2 million -- to lobby the public into voting yes. At the same time, Connelly registered a new company, President Casinos Inc., with the Securities and Exchange Commission and announced in the prospectus that the riverfront operations in St. Louis were "losers" that were only "holding the fort" until the November vote. "The company is maintaining these operations at current levels solely to keep its position in St. Louis should gaming be approved," the prospectus stated.
Connelly's need to hold the fort was based on the city's decision to lease up to five spots on the downtown riverfront for floating casinos. At Schoemehl's request, the Board of Alderman approved leasing three of them to Connelly and was considering bids from six other casino operators for the remaining two. Schoemehl favored one in particular, Jumers Hotels of Peoria, Ill., and had ordinances drafted and ready to go. The Jumers bid, an $80 million proposal, included two casinos and a hotel on the Landing.
The elections in 1992 and '93, however, changed everything. Schoemehl lost the Democratic gubernatorial nomination to Mel Carnahan in August, and voters approved riverboat gaming in November. In March of 1993, Freeman Bosley Jr. was elected the first African-American mayor of St. Louis, defeating three other candidates, including then-Aldermanic President Thomas A. Villa, who was supported by Connelly.
"We had already drafted ordinances (to allow for the Jumers leases) and got them sent over to the Board of Aldermen," Schoemehl says. "We would have had five boats and the Casino Queen across the river. And there would have been so much revenue coming off those boats, you would have had an entire entertainment-convention district, and that would have sparked the development of a convention hotel. The Gaming Commission was prepared to issue those licences.
"But JoAnn Wayne, who was chairman of the (aldermanic) ports and street committee, said she didn't want to pass the legislation while I was still mayor," Schoemehl continues. "She said this was very significant legislation, and she wanted the first African-American mayor of the city to sign it. So it got hung up from November to April."
In the meantime, riverboat gambling exploded across the country. In 1992, President Casinos' gambling boat in Biloxi opened, and the company began its transformation of the Admiral into a casino after six years of abandonment. By the end of the year, President Casinos was the first riverboat gambling company to go public. It got $18.50 per share in its initial offering. Riverboat gaming was hot. By June 1993, the stock price had shot up to $49.13, the company's revenues tripled from $4 million to $12 million in the previous fiscal year, and the Admiral wasn't even open for business yet.
Across Missouri, casino revenues called to lawmakers like a potential royal flush. In Illinois, the Alton Belle had opened in 1991 and was doling out $15 million a year in state and local taxes. Within six months of opening in 1993, the Casino Queen had handed over more than $12 million. Analysts predicted the St. Louis market would support $1 billion in annual gambling revenues.
Everyone wanted a seat at the game, and casino companies offered mouthwatering jackpots to every player at the table. "Back then, people were even talking about a casino in downtown Maryland Heights," Schoemehl says. "It was a joke. Who ever heard of downtown Maryland Heights back then? Everyone was laughing about it."
When Bosley took office in April '93, there were so many offers for casinos in St. Louis city that he threw out Schoemehl's gaming-district plan and reopened the river to the highest bidder.
Promises made to the city by developers included sunken amphitheaters, marinas, museums, movie theaters, moving sidewalks, skywalks, elevated monorails, winter gardens, recreation centers, dolphin shows and condominiums with lakes. Donald Trump even offered to build a 28-story hotel built entirely of gold and glass. But as bid after luscious bid for casinos poured onto Bosley's desk, the city took a chance and upped the ante. It asked for bigger and better hotels. It wanted more parking, more amenities, more taxes from the developers.
Then the hammer fell, and fell hard. Early in 1994, the Missouri Supreme Court struck down certain provisions in the state's new gambling laws and ruled that a constitutional amendment would have to be added by voters to allow games of chance. On April 5, 1994, voters rejected the amendment, which meant games such as slot machines would not be allowed on Missouri's boats.
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