The Indiana Gaming Commission said a Marion County court should reject a lawsuit filed by seven of the 18 known investors of Spectacle Entertainment, the parent company of Hard Rock Casino Gary. The group’s lawsuit challenges the IGC’s new integrity rules for privately owned casino companies. The IGC said it’s required to strictly regulate and license all persons who directly or indirectly control an Indiana casino as a way to maintain public confidence and trust in the state’s gaming industry.
Under the new rules, which took effect in March, the IGC mandated that investors in Spectacle Entertainment, and anyone with an interest in any entity holding a stake in Spectacle, must submit detailed financial and background information to acquire a Level 1 occupational license. In a statement, the IGC said, “Since early 2020, Indiana’s gaming industry has been the subject of widely reported derogatory information concerning entities in which these plaintiffs hold ownership. These events have cast a shadow over the industry and served to undermine its reputation and integrity.”
The statement continued, “As the Indiana Riverboat Gambling Act makes clear, public trust requires strict regulation, which demands adequate information and transparency concerning casino ownership and operations. The commission is the regulator with the duty to ensure that such demands are adequately met.”
The statement referred to the federal indictment of former Spectacle Vice President John Keeler for campaign finance violations, and the alleged nefarious activities of former Spectacle Chief Executive Officer Rod Ratcliff that caused him to be expelled from the state gaming industry.
The IGC further denied the allegation its real goal is “to harass, annoy and cause substantial economic loss to investors whom the IGC does not favor.” The commission responded, “No action of any kind has been taken by the commission, or threatened by the commission, against any of the plaintiffs under the rule. The commission is not threatening to take any plaintiff’s property. Nor is there anything resembling an emergency here. If some action is taken against them in the future, plaintiffs will receive the due process required.”
Therefore, according to the IGC, there is no reason for the court to end enforcement of the integrity rules. The commission said Indiana law requires the IGC do exactly what the Spectacle investors are attempting to prevent—that is, “exercising oversight in an industry that, for long-established reasons, must be subjected to intensive and detailed regulatory scrutiny.”
Lawyers for the Spectacle investors have filed two rebuttals to the IGC’s opposition to their motion for a temporary restraining order. Both claim the IGC is acting in bad faith and conspiring with Spectacle to deprive the investors of their rights as shareholders in the company if they don’t apply for licensure or sell their shares back to Spectacle at an “unreasonably low” price.
The investors include two entities, Laelaps LLC and MD Twenty-Twenty LLC. Both are registered to retired attorney and former state Rep. Daniel Dumezich, past treasurer of the Indiana Republican Party. Other investors include insurance company executive Stephen Hilbert, a former business partner of Donald Trump; statehouse lobbyist and former state Rep. Matthew Whetstone; and former Indiana Secretary of Commerce Dan Hasler.