The Indiana Gaming Commission is investigating Spectacle Entertainment, owner of Majestic Star casino on Lake Michigan, which is seeking to open a new Terre Haute casino in Vigo County.
The probe relates to a political consultant’s recent guilty plea on federal charges of illegally funneling campaign contributions for an Indianapolis-based gaming company, allegedly Centaur Gaming, to former state Senator Brent Waltz, who unsuccessfully ran for Congress in 2016.
Court records indicate Charles O’Neil, formerly vice president of the Virginia-based consulting firm Strategic Campaign Group Inc., received more than $15,000 from Centaur through fake invoices and contracts for services prepared by the company’s vice president and general counsel. O’Neil admitted in federal court in Arlington, Virginia to arranging for several people to write checks to Waltz’s campaign in 2015 with casino company money funneled through a fake $38,500 contract with Strategic Campaign Group for political work, according to court documents. The “conduits” were then reimbursed for their contributions, court records said.
The scheme allowed the Indiana casino company to bypass federal election laws prohibiting corporate contributions and limiting individual contributions, according to court records. The plan also allowed the casino company to “disguise the fact that Company A”—allegedly Centaur Gaming—”was the true source of the funds,” court records indicate.
Spectacle President and Chief Executive Officer Rod Ratcliff and General Counsel John Keeler were top executives at Centaur Gaming, which sold Indiana’s two racinos in Anderson and Shelbyville to Las Vegas-based Caesars Entertainment in 2018 for $1.7 billion. Soon after they formed Spectacle to purchase the Gary casinos and in 2019 successfully lobbied state legislators to allow operations to move onto land. Ground was broken January 9 for Spectacle’s $300 million Hard Rock Casino Northern Indiana.
Gaming Commission Deputy Director Jennifer Reske said, “The Indiana Gaming Commission is aware of information contained in court filings in the Eastern District of Virginia referencing an Indiana gaming company based in Indianapolis in 2015, which we understand to be Centaur Gaming. Certain key people in that company now own and operate Spectacle Gaming, the holder of the Majestic Star Casino license in Gary. Spectacle is also currently undertaking a land-based casino project in Gary and pursuing the new casino license in Vigo County.”
She added, “The information we received is concerning and the commission has begun a review pursuant to its statutory responsibilities into this matter. The commission is working to ascertain the immediate impacts of this information upon the new casino construction project in Gary.”
Due to the situation, the commission canceled its February 7 meeting, where it was expected to approve Spectacle’s gaming license application for a $125 million Hard Rock Rocksino in Terre Haute. Spectacle is also the only company that applied to the Indiana Gaming Commission for the Vigo County license. Reske added, “Majestic Star Casino will continue normal operations at this time.”
Spectacle Entertainment issued a statement, noting, “Spectacle Entertainment has been made aware that a paid consulting firm, who once contracted with Centaur Gaming, has been implicated in charges related to campaign finance violations in Virginia. Spectacle pledges to fully cooperate with the Indiana Gaming Commission as it investigates this matter. We take such matters very seriously and we will share more information should additional details become available.”
Terre Haute Mayor Duke Bennett stated, “The gaming commission is a very professional group. They really dig into this stuff. I have always felt good about what they do to investigate anybody who has a license or wants a license. So I guess if some, you know, things shake out and that’s their job to vet those things and decide whether a particular entity is the right one or not. They’ll get that sorted out and we’ll all move on from that.”
Vigo County Commissioner Brad Anderson stated, “From what I understand, it was in 2015. There was no talk of Spectacle or anything like that, you know, in our community. You know, not knowing anything about Spectacle other than they are a large company. We just look at it as a great opportunity for our community with the jobs and the investment that Spectacle is willing to pay. The referendum showed that people want the gambling here–the majority–and the income and the tourism side of it.”
State Senator Jon Ford, one of the authors of the legislation that paved way for a Vigo County license, noted Indiana has some of the most stringent casino license requirements in the U.S. “This is part of the process. The Indiana Gaming Commission think they found something they want to look at further. It is part of what we have set up here at the state to make sure that we keep a very clean gaming industry. I think it is a delay at this point, but I am glad they are taking the time to step back and review the issue.”
The Terre Haute Chamber of Commerce issued the following statement:
“The Chamber remains committed to this project for the good of our community. We respect the gaming commission’s process in this matter and await next steps.”
Washington, D.C., attorney Brett Kappel, an expert in government affairs and public policy and a partner at the Akerman law firm, noted the prosecutions of O’Neil and his co-defendants could mean Centaur, Keeler and Ratcliff also could face federal charges, along with other employees who may have been involved. For someone to be criminally prosecuted, the government must show the violation was knowing and willful, Kappel said. “I wouldn’t be surprised if there’s already a sealed indictment of the company,” he commented.
However, the candidate who received the funds likely would not be prosecuted unless he knew about the scheme. “It is extremely rare for the candidate receiving the illegal funds to be prosecuted. I’ve never seen it happen unless they were actively involved in the scheme. That usually only happens when the candidate owns the company making the illegal contributions,” Kappel said.
Spectacle’s Rocksino plans call for a 100,000-square-foot venue including 1,200 slots, four restaurants, four bars, an enclosed, temperature-controlled walkway to the adjacent Home2Suites by Hilton hotel and a future on-site hotel. It would create 600 new jobs and generate more than $7 million for local governments and business development. Also, Spectacle would pay $3 million based on $100 million adjusted gross receipts and make a payment equal to 3 percent of the company’s net commission received from any sports wagering vendor.
Last year, Spectacle drew scrutiny when Ratcliff provided private flights for Governor Eric Holcomb and his wife, Janet, when Ratcliff was lobbying to change state gaming laws to benefit his company. The Indiana inspector general later said Holcomb violated no ethics rules by accepting the flights.
The flights were among $500,000 Ratcliff and his companies contributed in 2018 to the Republican Governors Association, which gave Holcomb $7.6 million of the $14.5 million he spent on his 2016 election campaign.
