The Indiana Gaming Commission recently told Spectacle Entertainment it must operate its two Majestic Star Casinos in Gary at least until June.
Spectacle planned to close the casinos in March or April when its $300 million land-based Hard Rock Casino Northern Indiana in Gary was due to open. As a result of the commissioners’ order, the new venue could sit empty and unused even after construction is completed.
The commission took the action following a December vote that forced former Spectacle CEO Rod Ratcliff to give up his ownership stake in the company.
According to commissioners, Ratcliff was involved in a scheme to illegally funnel casino company money to a former state lawmaker’s unsuccessful 2016 Republican congressional campaign. He also is accused of failing to cooperate with the commission’s investigation, associating with others impeding the commission’s investigation, acting outside licensing conditions, improperly acquiring and transferring Spectacle ownership units and changing the terms of a trust agreement.
Ratcliff also had employees at his former company, Centaur Gaming, transfer $900,000 to his personal horse wagering account under the description “marketing other.” Ratcliff did not disclose the account’s earnings as required for his state gaming license, a filing said.
In addition, he allegedly offered executive positions at Spectacle Entertainment to two unnamed lobbyists, even though they had no previous casino management experience. One of them was given Spectacle ownership shares and then a “significant monetary settlement” when the job offer was withdrawn. The commission said those actions were not reported to state regulators, as required.
Last September, former Spectacle Vice President John Keeler was indicted on federal charges in connection with the illegal campaign contributions. Ratcliff hasn’t been charged in the federal case and he denies any wrongdoing.
Commissioners voted unanimously to impose a 90-day emergency suspension of Ratcliff’s occupational license. He still has a significant ownership stake in Spectacle, which also owns the Hard Rock property through a partnership and operating agreement with Hard Rock International.
Commission Executive Director Sara Gonso Tait said, “Unfortunately, the actions of parties associated with Spectacle have created a high level of uncertainty regarding both suitability and project timeline. Until an acceptable path forward is identified, the commission will continue to act within its authority to protect gaming revenues and employees at the current operation in Gary.”
The commission recently issued a new filing against Ratcliff that would result in permanent revocation of his gaming license. The filing stated that his “association with gaming in Indiana must cease.”
It said, “Any perception that Ratcliff’s multiple and brazen violations would not be met with the most significant consequence available would diminish the integrity and reputation of the industry and the commission. Furthermore, it would send a dangerous message to other Indiana licensees that such behavior will be tolerated in Indiana.”
Ratcliff has 20 days to respond to the filing against his gaming license before it’s considered by an administrative law judge and then the commission’s board, said Gaming Commission Deputy Director Jennifer Reske.
Ratcliff sued the gaming commission last month, claiming it wrongly acted against him since it didn’t allow a fair hearing on allegations that he continued to exert control over the company in violation of state orders. Ratcliff’s lawsuit also claims state regulators interfered with his efforts to sell his 22 percent share of Spectacle and that they tried to force him to accept a “fire-sale price” from Hard Rock International.
In a court filing, Ratcliff said, “When the curtains are pulled back, the commission’s actions evidence an apparent motivation to push Ratcliff out in favor of Hard Rock—the minority member in the project—so that Hard Rock can fully own and operate the Hard Rock Casino Gary.”
Meanwhile, Hard Rock’s website still states it’s scheduled to open this spring. It’s continuing to recruit, hire and train hundreds of employees. Hard Rock Chief Operating Officer Jon Lucas said the company is working with the gaming commission and Spectacle Entertainment to resolve the ownership dispute and “remains committed to the successful completion of the Hard Rock Northern Indiana project.”
When it does open, the Hard Rock Casino will offer 1,650 slot machines and 80 table games, a sportsbook and bar, six restaurants, including a Hard Rock Café, a Rock Shop retail store and a 2,000-seat Hard Rock Live concert venue.
