The Indiana Gaming Commission and the Gary City Council both recently unanimously voted to allow Spectacle Entertainment to move its Majestic Star riverboat casino in Gary from Lake Michigan to a land-based site. It will be rebranded as the $300 million Hard Rock Gary and open by the end of 2020.
Spectacle Vice President and General Counsel John Keeler said Hard Rock will develop and manage the project. Keeler added Hard Rock’s involvement was a key component due to upcoming gambling expansion in Illinois—particularly in the Chicago market where Gary is located. “We thought we had to partner with somebody that was the gold standard of the casino business,” he said.
The project will include a 225,000-square-foot casino with 2,764 gaming positions, up from 1,683 at the Majestic Star boats, plus a 2,000-seat concert hall. A 200-room hotel and parking garage will be built in the second phase, Keeler said. He noted Spectacle has scaled back the project and due to the planned Chicago casinos. However, it will provide 1,600 jobs—an increase from the 950 at Majestic Star. The hotel will add another 200 employees, he said.
The land-based casino will be located just off the interstate, Keeler said, making it much more accessible than the Majestic Star boats. Spectacle will pay the state a $20 million relocation fee in five annual installments of $4 million each.
Additionally, under the local development agreement, the city will receive 3 percent of the casino’s annual adjusted gross receipts, with a minimum of $6.15 million. Revenue above that will be placed into a community development fund for charitable purposes, Keeler said. Spectacle also will pay the city 3 percent of revenues from mobile sports betting.
The Majestic Star operates under two casino licenses. Spectacle kept one for its new inland casino and gave up the other, which will move to the Terre Haute area in Vigo County. Other operators can apply for that license by December 1, as long as voters approve a casino in the November 5 referendum. Keeler said Spectacle and Hard Rock plan to apply for the license. Full House Resorts, owner of the Rising Star Casino in southeastern Indiana, also is interested.
The Advance West Central Indiana political action committee recently launched a campaign, including public forums, to promote a Vigo County casino. The group’s Chairman John Collett said the project would create 150 construction jobs and 400 new jobs, and generate $7 million in annual tax revenue for local schools and government.
In related news, the Indiana Lottery Commission reports that the Hoosier Lottery recently directed $312 million in profits to the state—a 2 percent increase over 2018. Hoosier Lottery proceeds to the state have increased by about 50 percent, up from $205 million in 2012, the last year before the lottery hired IGT Indiana to manage the state’s lottery operations.
Even so, lottery officials said the record profits did not achieve the goal of $410 million by 2018, set when IGT Indiana was hired in 2012. The company missed minimum income targets in 2014 and 2015; lower goals were established in a renegotiated 15-year contract in 2015, resulting in a $11.2 million performance bonus payment to IGT Indiana for this past year—the second year the company will receive such a bonus.
Officials said lottery ticket sales revenue increased about 6 percent to $1.35 billion, due to higher demand for scratch-off games and jackpot games like Mega Millions and Hoosier Lotto. Mega Millions ticket sales exploded in October when the jackpot reached $1.6 billion, the largest lottery prize in U.S. history. Hoosier Lottery officials expect a slight drop in revenue for the coming year due to a drop in jackpot game sales.
Lottery Executive Director Sarah Taylor said, “The skills and expertise of an international gaming company” helped improve lottery results.
Indiana directs $60 million of lottery proceeds to pension funds for teachers, police officers and firefighters; most of the balance goes toward lowering auto excise taxes.
