Vacant Indiana Casino License Draws Four Bids, But Appeal Could Delay Award

By | September 23, 2021

The Indiana Gaming Commission announced on Wednesday that four companies submitted bids to build a land-based casino in Terre Haute.

Terre Haute Casino
A rendering of Churchill Downs Incorporated’s proposed casino for Terre Haute, Ind. The Louisville-based gaming company was one of four companies to submit an application to the Indiana Gaming Commission to obtain a license to operate a casino in the west central town near the Illinois border. (Image: Churchill Downs Incorporated)

Those competing to develop the state’s 13th casino are Churchill Downs Incorporated, Full House Resorts, Hard Rock International, and Terre Haute Entertainment – a partnership that includes Premier Gaming Group. Submissions were due by 4:45 pm ET Wednesday along with a $50,000 application fee.

Terre Haute is located near the Illinois state line and about an hour west of Indianapolis is in Vigo County. The state legislature passed an expanded gaming bill two years ago that freed up one of the state’s casino licenses and assigned it to the west central Indiana county. Voters there overwhelmingly accepted the license in a November 2019 referendum.

The commission initially awarded the casino license to Spectacle Jack LLC in May 2020. It was the only company to apply for the license and secured a partnership with Hard Rock to operate the casino. However, the approval process was delayed due to the IGC’s investigation into the parent company, Indianapolis-based Spectacle Entertainment. That arose after commission officials learned Spectacle executives were tied to a federal probe into illegal campaign contributions.

Those Spectacle executives, Rod Ratcliff and John Keeler, would eventually back out of the project. That left Greg Gibson, a Terre Haute businessman and Spectacle co-founder, to lead that effort. Gibson renamed the venture Lucy Luck, but the project stalled for more than a year.

In June, the IGC took the unprecedented step of not renewing Lucy Luck’s license after Gibson failed to convince commissioners of his plan to move forward.

License Appeal Could Delay Award

After the commission voted against renewal, it requested that IGC staff issue a new call for license applications. However, as the state moved forward to find a new partner, a new twist developed that could again cause a delay in the project.

Gibson chose to appeal the commission’s decision, and that case is currently before the state Office of Administrative Law Proceedings. Attempts to reach Gibson were unsuccessful Wednesday.

In a statement to Casino.org, newly appointed IGC Executive Director Greg Small said that while the stay could delay a license from being issued, it would not stop staff from reviewing and vetting new applicants.

“We are very pleased with the level of interest in the Vigo County casino license and look forward to a competitive selection process,” said Small, the former general counsel for the commission who succeeded Sara Gonso Tait as executive director earlier this month. “The work to evaluate these proposals begins immediately, with the goal of setting a Commission meeting date for official action before the end of the year… The (Lucy Luck) matter is pending before an administrative law judge and the IGC is hopeful that it will be decided expeditiously.”

Full House, Hard Rock Already Established in Indiana

Two of the applicants already have casinos in the state.

Las Vegas-based Full House operates the Rising Star Casino and Resort in Rising Sun. On its quarterly report conference call with stock analysts last month, President and CEO Dan Lee revealed that the company had previously considered Terre Haute and was again evaluating the opportunity.

Hard Rock, which is based in Davie, Fla., and owned by the Seminole Tribe of Florida, was recently approved by the IGC as the majority stakeholder for Hard Rock Northern Indiana. The $300 million project in Gary is the state’s newest casino.

As noted previously, Hard Rock was slated to operate a $150 million “Rocksino” for Lucy Luck, but Lucy Luck never was able to break ground on the project. In addition, IGC officials had substantial concerns about Lucy Luck’s management and a lack of clarity regarding $57 million in notes that would have been used toward financing the project.

Messages to both companies seeking comment were not returned Wednesday evening.

Churchill Downs Reveals Plans

Churchill Downs does not operate a casino in the state. However, the Louisville-based gaming company has a history in Indiana. It opened the first horse racing track in the state, Hoosier Park, in 1994, and the company currently holds a sports betting license.

The company best known for racing also owns or operates 10 casinos and four historical horse racing parlors.

About an hour before the application deadline, the company released a statement detailing some of the plans for its development, dubbed the Queen of Terre Haute Resort. The casino would feature 1,000 slot machines, 50 table games, a TwinSpires retail sportsbook, a 125-room luxury hotel, and multiple dining options.

Bill Carstanjen, CEO of Churchill Downs Incorporated, said the company would leverage its nearly 150-year history in gaming, entertainment and hospitality to bring a “world-class” attraction to Terre Haute.

We appreciate the local encouragement we’ve received as we’ve evaluated this opportunity,” he said. “In the days ahead, we look forward to making our case to the Indiana Gaming Commission as to why our proposal to build the Queen of Terre Haute is in the best interest of the residents and businesses of Terre Haute, Vigo County, and the state of Indiana.”

The company did not reveal how much it planned to invest in the project, but Churchill Downs cited a study by Purdue University economists forecasting the casino would produce a $190 million annual economic impact and create a 2 percent annual jump in the region’s gross domestic project. Construction would lead to 1,000 job opportunities, and when the casino opens, it would employ 500 people.

Terre Haute in Premier’s “Wheelhouse”

Premier Gaming owns the Magnolia Bluffs Casino in Natchez, Miss. The company is based out of Union, Ky., a suburb of Cincinnati, where Founder and President Kevin Preston resides.

Preston has nearly 30 years of experience in the gaming industry. Prior to creating the company in 2009, he was the COO and a senior vice president for Tropicana Entertainment. In that role, he was responsible for 14 properties and helped the company emerge from bankruptcy.

In an interview with Casino.org Wednesday evening, Preston said the company plans to release drawings and details of its casino proposal on Thursday. He added that a community the size of Terre Haute, a city of about 58,000 people and a metropolitan population of roughly 170,000, is right in the “wheelhouse” for Premier.

In other words, a smaller company would be a better gaming partner for a city like Terre Haute.

As the owner of the company, you could pick up a phone and call me,” he said. “We can build facilities just like those bigger folks, and it’s just not another casino for us.”

Premier’s partner in the application is a company called Terre Haute Entertainment Holdings LLC. He said it’s a New York-based company that’s a “lending partner” and involved with Magnolia Bluffs.

According to records available on the Indiana Secretary of State’s website, the New York City address tied to Terre Haute Entertainment is the same for a company called Sculptor Capital Management. The company has experience in the gaming industry as well.

In June, it announced that its Sculptor Real Estate Division provided a $565 million loan for the Sky River Casino being built by the Wilton Rancheria Tribe and Boyd Gaming near Sacramento. And according to a December 2019 article at Perenews.com, gaming was Sculptor Capital Management’s biggest exposure as gaming properties accounted for nearly a fifth of its real estate investments at that time.

The post Vacant Indiana Casino License Draws Four Bids, But Appeal Could Delay Award appeared first on Casino.org.

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