IGC Moves To Revoke Ex-Spectacle CEO Ratcliff’s Gaming License

The Indiana Gaming Commission on Tuesday filed notice with the Lake County Court that it will take administrative action to revoke the gaming license of ex-Spectacle Entertainment CEO Rod Ratcliff, adding another layer of intrigue surrounding Hard Rock Casino Northern Indiana.

The IGC issued an emergency 90-day suspension of Ratcliff’s license in late December, culminating a process that started in January 2020 with a federal campaign finance probe that led to an indictment of former Spectacle Vice President and General Counsel John Keeler and uncovered other issues of concern. The state regulatory agency had also previously ordered Ratcliff to relinquish all control of Spectacle Entertainment in June when he stepped down as the company’s CEO and chairman.

Following Ratcliff’s suspension, the IGC also endorsed stopping relocation of any gaming equipment from the Majestic Star Casino to the Gary property, which had been slated to open as early as March. The Times of Northwest Indiana is reporting the state agency has told the riverboat casino to expect to be in operation until June, throwing the timeline for opening the $300 million casino into doubt.

Ratcliff filed suit against the IGC in January, claiming it acted wrongly in issuing the suspension since he was given “no notice, no hearing, and no process before they stripped him of his license” while trying to sell his shares in the casino. During the December meeting, Hard Rock International disclosed it had made two offers to purchase Ratcliff’s shares, which total 22% of Spectacle Entertainment.

Hard Rock International ended negotiations, though, as it claimed Ratcliff sought amendments to the existing contracts in addition to the buyout of his shares. In his lawsuit, Ratcliff claimed Hard Rock’s initial offer was “less than 50% of the value that Hard Rock had paid for its shares long before the project got underway.”

Two new key allegations brought up in IGC filing

In the 113-page “Exhibit A” that accompanied the IGC’s filing to take administrative action to revoke Ratcliff’s license, the state body noted in its introductory comments that the former Spectacle CEO “has fundamentally undermined the Commission’s confidence and trust in his ability to act with the integrity and honesty required of him as a gaming licensee in Indiana.” The IGC added Ratcliff “flouted the trust and confidence placed in him by the Commission, by, among other things, submitting false information, (and) hiding conduct that violates Indiana gaming rules and regulations.”

The IGC outlined an instance in which Ratcliff made an oral offer of employment to an Indianapolis attorney to become the CEO of Spectacle Gary, which is the parent company of Hard Rock Casino Northern Indiana, in the fall of 2018. The IGC noted the three-year term offered compensation “at a rate that was not commercially reasonable salary for the position, implying there may have been other consideration involved.”

The oral agreement also allegedly included Class B units of Spectacle Gary equity. Though Ratcliff rescinded the offer by August 2019, Spectacle Gary issued 3,000 Class B units to the individual that month. In February of 2020, Spectacle Gary and the individual entered a mutual release agreement that included a “significant monetary settlement” scheduled to be paid in March 2021 that Keeler had signed on behalf of Spectacle Gary.

A second allegation dates to Ratcliff’s tenure as CEO of Centaur Gaming in which he failed to disclose income from FastBet, a mobile horse racing platform used for pari-mutuel wagering. The IGC alleges Centaur employees made repeated deposits of casino funds totaling approximately $900,000 between 2015 and 2019 in Ratcliff’s account under the description “marketing other.”

The IGC alleges Ratcliff did not disclose win/loss statements from this account while reporting other gambling wins and losses when applying for a gaming license in 2018. It alleges he also did not disclose this income that he may have derived from gambling, which would be required in applying for the license.

In its conclusion, the IGC noted that any of the “violations standing alone would carry the burden of revocation,” and stated that Ratcliff retaining his gaming license “would undermine the Commission’s ability to effectively administer, regulate, and enforce the gaming industry in Indiana in light of Respondent’s flagrant repudiation of his responsibilities and duties required with such licensure.”