Caesars received a huge boost Thursday when the Indiana Gaming Commission amended its 2020 order regarding its merger with Eldorado, allowing it to retain the Horseshoe Hammond casino in the northwest part of the state.
After hearing testimony from Caesars CEO Tom Reeg, who noted the company had successfully divested itself of Tropicana Evansville and will complete a deal to sell Caesars Southern Indiana to the Eastern Band of Cherokee Indians in the third quarter of this year in addition to committing nearly $100 million to Indiana Grand and Harrah’s Hoosier Park horse racing tracks, the IGC voted 4-1 to amend its order, which originally called for the group to divest itself of three properties in the state to allow the $17 billion merger.
Both the Tropicana Evansville and Caesars Southern Indiana deals were struck in 2020, and the IGC had granted an extension for Caesars to find a buyer for Horseshoe Hammond — the highest casino revenue generator in the state — until the end of this year.
Commissioner Marc Fine was the lone “no” vote, expressing concerns about the economic concentration of the state’s gaming revenues coming from Caesars. At the time of the vote last year, the merger would have given Caesars an estimated 60% of the revenue, but Reeg said that percentage has dropped to the “low 40s” with the sale of the two properties.
Reeg also pointed out Caesars enjoyed the support of the Hammond community and the importance of having a well-established operator in the northwest part of the state given the uncertainty of the gaming scene with neighboring Illinois on track to open nearby casinos in the suburbs of Cook County and downtown Chicago — both of which would be less than an hour from Horseshoe Hammond.
Spectacle Entertainment endures bruising meeting
Prior to the IGC’s vote to amend its 2020 order for Caesars, it also voted on casino license renewals for Hard Rock Northern Indiana in Gary and a “Rock-sino” in Terre Haute. Both properties are locally tied to Spectacle Entertainment, whose ownership endured many ups and downs in the run-up to May’s opening of Hard Rock Northern Indiana — with most of those issues surrounding former CEO Rod Ratcliff.
Spectacle’s spinoff for the Terre Haute venue, Lucy Luck, was met with criticism from multiple commissioners and the IGC staff for shortcomings in its bid to receive a casino license renewal. The IGC staff noted there was no active executive team in place, a point of frustration for Executive Director Sara Gonso Tait, who noted Lucy Luck was more than 13 months into being licensed.
Another key issue for Lucy Luck, according to Tait, is that the plans for financing the casino were incomplete, with requested information missing, and that the project was not fully funded. Commissioner Fine then noted the process was actually “more than 15 months” when counting the initial application process.
Commissioner Susan Williams followed up with her concerns, noting “that we have a company with no experience that has failed to hire an executive team with people of experience. And when we hear that can’t happen because there’s no gaming going on, it just highlights the lack of experience.
“This is basically a start-up company, and you want to bring your talent to the table. The fact there’s an inability to hire an executive team makes me wonder if the industry in general does not have confidence in this applicant. But the confidence level from my point of view of a start-up company that can’t hire an executive team is very low.”
The IGC unanimously voted to reject the request for renewal, with IGC Chairman Michael McMains asking Tait and her staff to draw up the paperwork to reopen the application process for the Terre Haute license.
Hard Rock COO Lucas asks to table Gary renewal
The shortcomings of Lucy Luck seeped into the license renewal process for Hard Rock Northern Indiana, with many of the concerns regarding Spectacle Entertainment also extending to Gary. The key difference, Tait explained, is “there is a company beneath Lucy Luck that also has Hard Rock management and equity from Hard Rock involved.”
Hard Rock Chief Operating Officer Jon Lucas struck a cooperative tone in offering to help address Spectacle’s shortcomings, and the support the casino giant has from the board was underlined when Williams noted that “Hard Rock was obviously doing an outstanding job in doing exactly what they’re supposed to be doing. At the same time, they’re going to be focusing on trying to remedy the situation so they can go about their day-to-day running a successful operation.
“We appreciate what you’ve accomplished up there in spite of the hardships of an ailing partner, and what we’re trying to do is get this partner well because we can’t give a gaming license to a company that’s not able or experienced to gain our confidence. So on the one hand, ‘Congratulations,’ and on the other hand, we’re sorry that you all have to go through this.”
Lucas had offered the possibility of tabling the license renewal until the next meeting, with the next one tentatively scheduled for Sept. 29. McManis took up Lucas’ offer of tabling the casino license renewal, but also accelerated the timeline to 30 days for Hard Rock to address those issues, with Fine offering a warning that the “expectation to receive a renewal is grossly limited” if progress is not made.