The Indiana Gaming Commission recently approved a deal allowing Hard Rock International to assume at least 85 percent ownership of the $300 million Hard Rock Casino Northern Indiana in Gary from Indianapolis-based Spectacle Entertainment. The casino, complete with Hard Rock’s trademark giant guitar, opened in May.
The gaming commission began investigating Spectacle and former CEO Rod Ratcliff in early 2020 after Ratcliff’s longtime business partner, former Spectacle Entertainment vice president John Keeler, was charged with making illegal campaign contributions. The gaming commission has said former Spectacle CEO Rod Ratcliff also was involved in that scheme; he agreed to give up his ownership stake and state casino license.
In addition, state officials also alleged Ratcliff continued to control Spectacle in violation of state orders, wrongly directed $1 million in casino company money into his own horserace wagering account and made improper job offers to government lobbyists.
Ratcliff has denied any wrongdoing and hasn’t been charged by federal authorities in the campaign financing case. Keeler is awaiting trial on the charges.
As a result, the gaming commission established owner integrity rules it said are needed to prevent any further corruption in Indiana’s casino industry. The rules require investors in Spectacle and Lucy Luck Gaming, the former Terre Haute casino license holder, to disclose extensive information about their personal backgrounds and finances to protect the integrity of gaming in Indiana.
But seven lawmakers from central Indiana took offense. They wrote a letter on July 26 to IGC Chairman Michael McMains, threatening to sponsor legislation in the 2022 session to prevent the IGC from inquiring into the personal and financial connections of investors in privately-held casino companies. The seven wrote they’re concerned about “the privacy rights and investment strategies of citizens,” and the potential “such requirements may unfairly discourage small investors from participating” in the casino industry.
They stated, “We also ask that you reconsider the potential gain of knowing whether a minority stakeholder owns 10 shares of Apple versus the impact of delaying or prohibiting any aspect of the Gary casino project and the construction of the Terre Haute gaming facility, and the potential impact upon both economically depressed communities.”
The letter was sent a few days after Marion County Judge John Chavis II wrote, “The IGC investigated these activities revealing undisclosed financial transactions, hidden ownership transfers, improper use of funds, improper accounting practices, ex parte communication with certain former commissioners and other matters,” Chavis said.
In response to the legislators, IGC Executive Director Sara Tait said, “Because integrity and reputation standards apply across gaming jurisdictions both here in the United States and internationally, casino licensees risk harm from associations with scandals and illegal activity. Ensuring Indiana maintains a reputation as a clean and strict gaming jurisdiction is a benefit to all stakeholders.”
The Spectacle investigation also has put the brakes on a planned casino in Terre Haute. Last year, state officials forced Spectacle to give up ownership of that $125 million project to local businessman Greg Gibson, who had an agreement with Hard Rock. But in June the IGC voted against renewing the casino license for Gibson’s company, Lucy Luck, because it hadn’t hired an executive team or secured full financing after more than a year. The IGC has set a deadline of September 22 for interested operators to submit proposals for the Terre Haute gaming license.
