The Indiana Gaming Commission unanimously voted to renew Hard Rock’s casino license for its newest location in Gary on Wednesday, with the gaming and entertainment giant also gaining approval to become the majority owner of the $300 million venue, which opened in May.
The vote to renew the license had been tabled at the previous meeting in late June due to issues with Hard Rock’s local partner, Spectacle Entertainment Group. Spectacle’s struggles, most of which involved former CEO Rod Ratcliff, had put Hard Rock Northern Indiana in precarious positions prior to its opening. In that same meeting, Spectacle spinoff Lucy Luck was rejected in a bid for a casino license renewal in Terre Haute, where it had planned to open a “rock-sino” with Hard Rock.
Hard Rock Chief Operating Officer Jon Lucas attended the IGC meeting in person in Indianapolis, detailing the changes in ownership structure — the most important being that Hard Rock would pay Spectacle an undisclosed amount to increase its ownership stake to approximately 85%. In turn, Spectacle would use some of that money to redeem the shares of minority investors.
While Spectacle Vice Chairman Greg Gibson would have most of the remaining 15% ownership stake, the group would become an “institutional investor” and have no influence on the day-to-day operations of Hard Rock Northern Indiana. Lucas also pledged that the casino’s Board of Managers would consist of members appointed by Hard Rock and an independent member acceptable to the IGC, and the casino’s corporate officers would be Hard Rock executives with “extensive gaming industry experience.”
Lucas also pointed out the gaming side of Hard Rock Northern Indiana has flourished despite the background noise, generating more than $78 million in gross gaming revenue in its first 79 days of operation. That figure included a state-leading table win total of more than $9 million in July, when Hard Rock also led all Indiana casinos in table drop with more than $45 million.
Furthermore, Lucas said Hard Rock is aiming to open its sportsbook late this quarter or early in the fourth quarter of 2021. The unanimous vote approving the ownership change paved the way for the unanimous vote to renew the casino license.
IGC also approves Caesars S. Indiana transfer to EBCI
The state gaming agency also approved the transfer of ownership of Caesars Southern Indiana to the Eastern Band of Cherokee Indians (EBCI), one of two Indiana-based divestitures required by the IGC in order for it to approve Caesars’ $17 billion merger with Eldorado Properties in July 2020. Originally, the IGC asked for three divestitures, but it amended its order in June, which allowed Caesars to retain Horseshoe Hammond.
The IGC previously approved of Caesars’ sale of Tropicana Evansville to Bally’s in May, and during its presentation Wednesday, the EBCI said it had financing in place for a Sept. 1 close that includes a $250 million equity purchase agreement with Caesars as part of an overall $280 million transaction. The EBCI broke out the latter figure by noting that $160 million has been financed and will provide equity for the remaining $120 million.
The terms of the equity agreement include six months of transition services and an agreement with William Hill and Caesars Digital to operate a brick-and-mortar sportsbook, along with the right to the first online skin at market terms. Not including the recently opened Hard Rock, Caesars Southern Indiana has been the only casino in the state operating without a mobile sports wagering component.
The Cherokees also expected to retain 100% of the nearly 900 jobs currently at the casino and add approximately 25 full-time positions with the return of corporate functions at the property.
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