The saga of Lilly Belle’s Casino in Black Hawk
By David Forsyth, PhD
As the gambling industry took off in Black Hawk and Central City in the early 1990s, it attracted a great deal of attention from outside investors and from some of the larger casinos companies based in Las Vegas and Atlantic City. One of those investors was talk show host and game show inventor Merv Griffin.
In 1992, Griffin’s company Resorts International took over management of the new Lilly Belle’s Casino on Gregory Street in Black Hawk. Like Griffin, Resorts International had a colorful history. The company started as a side business of the Mary Carter Paint Company under the leadership of James Crosby. With the paint business declining, Crosby expanded the company into resort development in the early 1960s. By 1968, the company sold off the paint business to focus solely on property development. Its earliest hotels and casinos were in the Bahamas, and the company also dabbled in fast food chains and attempted to buy Pan Am Airlines in 1969. Their biggest casino developments, however, were in Atlantic City, including the infamous Taj Mahal Casino.
James Crosby died in 1986, and real estate developer Donald Trump eventually bought a controlling stake in Resorts International. As the budget for the Taj Mahal Casino exploded and the company found themselves having trouble paying their debts, Trump offered to buy the remaining stock in the company for $22 a share. At that point Merv Griffin stepped in and offered $35 a share. The highly publicized takeover battle saw Trump and Griffin filing lawsuits against each other. The battle was finally resolved in November 1988 when Griffin purchased Resorts International for $365 million while Trump purchased the Taj Mahal from the company for $273 million.
Griffin financed his purchase of Resorts International with high interest junk bonds from Michael Milken, and within a year the company began defaulting on interest payments to the bondholders. In 1989 Resorts International filed for bankruptcy protection, with bondholders eventually receiving 78 percent of the company’s stock and Griffin himself investing $25 million in the company. The company also agreed to put its Paradise Island resort for sale for $250 million, but never received an offer over $150 million for it.
While the financial issues continued to plague the company, Merv Griffin and Resorts International became interested in development in Black Hawk, and, in 1992 signed a six-year agreement with Arun Pande, owner of the new Lilly Belle’s Casino, to take over management of it. Resorts International put somewhere between $734,000 and $2.6 million into Lilly Belle’s, which Pande later claimed was their attempt at obtaining an equity interest in the casino.
The casino was in a newly built three and a half story, 12,000 square foot building on Gregory Street in Black Hawk. A new rock wall behind the casino had cost almost $1 million alone to build. Also included with the property were four historic houses to the east of the casino building. Parking was available for 115 cars, in addition to a lot that could be developed for a valet lot. At the time that Griffin and Resorts International took over, Lilly Belle’s had 70 slot machines with plans to expand it to hold 700.
But, less than a year after taking over, Griffin and his company pulled out of the Lilly Belle’s deal. Casino builder and owner Arun Pande blamed Griffin’s departure on decreasing profits and higher taxes, the then $5 limit on wagers, and dealing with the historic preservation rules in Black Hawk. Pande said that he would be taking over management of the casino and was granted a state gaming license in February 1993 to do so.
Griffin’s departure was only the beginning of Lilly Belle’s troubles though. In October 1993 the casino filed for bankruptcy after some funding failed to materialize. Creditors then began battling to take control of the casino, with one company, Calendar Capital, filing for a license in February 1994 to operate the casino. Pande and his partner in the casino also faced felony charges for failing to report investors who owned more than 5 percent of the casino on their gaming application.
With so much trouble surrounding the casino, the state of Colorado suspended Pande’s gaming license and pulled the casino’s license and ordered it closed in February 1994. It never reopened, and four years later Pande was still arguing that he should not have to pay taxes on the money from Resort International because it was an investment and not income. Merv Griffin changed the name of Resorts International to Griffin Gaming and Entertainment in 1995 and sold it to Sun International in 1996.
The lender behind Lilly Belle’s Casino foreclosed on it and it was for sale for many years for just under $3 million. The City of Black Hawk eventually purchased the entire property and in 2014 tore down the casino building as part of its new Gregory Street Project, eliminating the traces of Merv Griffin’s only Colorado casino venture.