The Eastern Band of Cherokee Indians (EBCI), the new owners of Caesars Southern Indiana, celebrated their first venture into commercial gaming with a ribbon-cutting ceremony at the casino resort across the river from Louisville.
EBCI Holdings, the tribe’s commercial gaming arm, took possession of the casino last month. That’s after the Indiana Gaming Commission approved the $250 million sale from Caesars Entertainment in August. The deal was first announced last December.
Aside from who holds the license, very little has changed.
Outside of some possible changes in dining options down the road and some other potential updates, company officials expect that will likely stay that way for the time being.
The new owners were allowed to keep the existing name through a licensing arrangement included in the sale. The casino itself is less than two years removed from moving off a riverboat and into a $90 million land-based facility on the grounds. As EBCI Holdings CEO Scott Barber noted, the land-based casino was open only for a couple of months before the COVID-19 pandemic forced a three-month closure in March 2020, and then a gradual reopening.
We essentially bought a brand new building, which is a world-class asset with a strong financial operation and a great team,” said Barber, who worked as a Caesars executive prior to the merger with Eldorado Resorts.
Barber added that EBCI Holdings retained all of Caesars existing workforce.
How the Deal Happened
EBCI entered into the commercial gaming realm as the tribe was seeing competition for the first time in North Carolina. The Cherokees are still waging a court battle against the federal government regarding the approval of the Catawba Nation’s casino venture near Charlotte. In addition, voters in neighboring Virginia approved commercial casinos. So, tribal leaders brought on Barber as a consultant.
Indiana was identified as a market entry point, because at the same time, the IGC ordered Caesars and Eldorado to sell three of their combined properties in the state in order to approve the $17.3 billion deal.
The new leadership at Caesars marketed Tropicana Evansville and the Elizabeth, Ind., casino. Earlier this year, the IGC agreed to allow the Las Vegas gaming giant to keep a third casino, Horseshoe Hammond, citing the recent changes in the northwest Indiana market and the potential developments in nearby Chicago.
Challenges Remain as EBCI Seeks Commercial Growth
It wasn’t necessarily an easy sell for tribal officials to convince the EBCI Tribal Council to invest millions into the project. And EBCI Principal Chief Richard Sneed said Wednesday there are still some challenges ahead. For instance, he said that tribal citizens must understand that the nation will not immediately get all of the proceeds from Caesars Southern Indiana. Laws limit the annual return to 25 percent.
“This isn’t Indian gaming. You can’t have all the money come back to the tribe,” he told Casino.org. “Our revenue allocation plan for Indian gaming is all the revenue comes in. Half of it goes directly to the people in per capita distribution. The other half goes to government operations, and a percentage goes into endowments.”
While the holdings company can only provide the tribe with a smaller return, it would be able to use the remaining profits to invest into other properties and opportunities to spur its growth. Depending on the project, it will likely take at least three commercial casino properties to offset the expected loss in revenue once Catawba opens its permanent Two Kings resort (should EBCI’s appeals not succeed), and other Virginia casinos open.
Expanding commercially and creating the portfolio needed to mitigate the anticipated local losses will be a “long game” for the nation, he added
With an eye on growth, Sneed told Casino.org Wednesday that he’d like to see the holding company diversify its partners. Still, at the same time, there’s value in building on the existing relationship with Caesars.
“The partnership we’ve had with Caesars has been phenomenal,” he said. “Of course, with the Total Rewards program (the Caesars rewards program in use at Southern Indiana and the two Harrah’s Cherokee properties), we want to keep that player database. Those are decisions that the holdings company will make and the board will make.”
Competition Ratcheting Up in Louisville Market
The change in ownership also has not affected the bottom line at Caesars Southern Indiana. Earlier this week, the IGC released the September revenue report, and the $18.6 million in adjusted gross revenues again makes it the top southern casino and among the top five overall statewide,
But there is competition looming across the river. Churchill Downs Incorporated has invested millions in historical horse racing (HHR) parlors across Kentucky. Last month, the Louisville-based gaming company revealed plans for a parlor in downtown Louisville that would include 500 of the slot-like machines. It would also be Churchill’s second such property in Louisville, and Caesars patrons driving back toward Louisville see several signs promoting Derby City Gaming, Churchill’s other area venue.
Churchill Downs Incorporated CEO Bill Carstanjen said the new venue would be “a state-of-the-art entertainment destination for tourists and downtown visitors,” many of whom would also consider the 20-minute drive from downtown to Caesars.
EBCI tribal officials and company leaders had dinner Tuesday night in downtown Louisville not too far from where the new venue is expected to be up and running by early 2023.
Sneed said there’s always a concern when a competitor makes a move in the region. But he noted that Caesars still has several advantages. While HHR machines look and play similarly to Class III slot machines, Caesars also offers table games, which are illegal in Kentucky.
“Competition’s good because that’s going to require us to up our game to attract players here,” he told Casino.org. “That being said, I think there’s a very different type of player that is content with going to a slot parlor, and one that would want to come to an entertainment venue like Caesars Southern Indiana.”
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