In 2014 Dan Lee, chief executive officer at Full House Resorts, owner of the Rising Star Casino Resort in Rising Sun, Indiana, unsuccessfully asked the legislature if he could move 1,400 of the casino’s slots and table games to the former Indianapolis International Airport site. Lee said new competition in Cincinnati is hurting Rising Star, so he wants the state to allow him to operate in more profitable areas.
Lee explained, “The state has found itself in an unusual position where a lot of its gaming capacity is in the wrong places. When it was legalized some 25 years ago in Indiana, it was done at all the border communities, designed to bring in revenue from Ohio and Illinois and Michigan and Kentucky, to some extent. All of those places have their own casinos.”
Lee said he plans to return to the legislature for help, although Governor Mike Pence has said he will not support expanded gambling. However, lawmakers last year passed a bill allowing riverboat casinos to move onto land. In addition, state Rep. Todd Huston, who sponsored legislation removing restrictions on where casinos could be built and how many could be licensed, said the state eventually may let casinos move their games. But, he said, Indianapolis would not be a target in the near future.
Huston said, “That could be potentially open for discussion. But I think the difference is, everybody understands the economic impact and, frankly, the commodity that Indianapolis would be. If there’s going to be gaming in Indianapolis, it would need to be thought of in a large-scale economic development plan. Where’s the right spot to put it in? What are the right types of businesses to be around it? How do you attract the right interest?”
The Indianapolis Airport Authority rejected Lee’s proposal, chose one from a group called Athlete’s Business Network and then rejected that proposal. Now it’s restarting the development process.
State Senator Ron Alting, chair of the Senate Public Policy Committee, said Lee has not discussed his proposal with officials who could help him. “You’re going nowhere without those people’s support, so why put the time and energy forward to go to the airport without knowing whether it’s something truly feasible? That would have been the proper way to have done this, because the fact is that it would be the General Assembly that would issue that license and approve them. It was in my opinion not a very good business move.”
In response, Lee said, “We met with people on the City Council, people who represent the area. We met with people we knew were opposed.” Lee further said lawmakers oppose him on behalf of a competitor, Centaur Inc., which owns Hoosier Park in Anderson and Indiana Grand in Shelbyville. Both racinos could lose business to an Indianapolis casino.
Said Lee, “We were sticking it in their eye a little bit to propose to put a casino at the airport but we were in fact just responding to the request for proposals put out by the airport authority for developing a piece of land. So we said, you know, we’d put a big development there with a casino on it. And of course Centaur just about crapped in their pants.”
John Keeler, vice president and general counsel for Centaur Gaming, replied, “Unequivocally, we would oppose the relocation of Rising Star machines to anywhere, whether it be Indianapolis or Connersville. That is not part of our regulatory scheme. If you were to permit Rising Star to do that, how would you stop Majestic Star in Gary from doing it, or how would you stop Centaur from doing it?” Centaur President Jim Brown added, “Even though we’ve heard optimistic investor calls by Full House, I guess that’s not good enough right now, so Lee wants to change the rules of the game.”
Lee in the past has said Rising Star is barely breaking even due to increased competition. But in May Full House reported casino revenue rose 10.2 percent to $12.2 million during the first quarter over the same period in 2015.
In an earnings call, Lee told investors and analysts he blamed Centaur’s lobbying efforts for blocking his Indianapolis plan. Lee said a Centaur executive told him he didn’t have a “tinker’s chance in hell” of getting approval to build a casino in Indianapolis. “Then I started meeting with legislators, and I must have had six or seven of them tell me we didn’t have a tinker’s chance in hell of getting this through the legislature. And I finally turned to our lobbyist, I said, ‘Is that like an Indiana term?’ He’s like, ‘What do you mean?’ I said, ‘Tinker’s chance in hell. I mean, I don’t even know where it comes from, but everybody keeps using exactly the same term.’ It just tells me that their lobbyists were meeting with all the state legislators before we met with them and telling them to tell me that we didn’t have a tinker’s chance in hell.”
In response to Lee’s charges, Alting commented, “I’m without words of understanding the philosophy behind Lee’s comments and particularly throwing jabs at people in the General Assembly that he’s probably going to need very badly to get what he needs done.”
However, Ed Feigenbaum, editor of the Indiana Gaming Insight newsletter, said, “Dan Lee is a guy that they’re used to hearing over-the-top rhetoric from. Full House may be paving the way for a bigger, stronger company.”
Lee said he’ll resume the discussion in the 2017 legislative session. “We’re trying to figure out exactly what to go to the legislature with now—and now is the time to think about it—and go in and say, ‘Look, just let us relocate these and maybe propose a few places we could relocate.'”
Meanwhile, a public hearing will be held Wednesday, June 8 regarding Full House’s application for a ferry boat ramp near its Rising Star Casino. A Full House subsidiary purchased four acres off Lower River Road for $240,000 in May.
The casino would like to offer a 20-minute ferry ride to residents in northern Kentucky, who currently must drive nearly one hour to reach the gaming venue.
A traffic study included with the application determined there is no need to improve the intersection at Lower River Road due to the low levels of traffic. However, area residents worry about traffic on the narrow, winding county roads.
Full House Resorts purchased Rising Star Casino in 2011. The property offers a 40,000 square foot gaming floor with table games, video poker machines and slots. Casino revenues were $152.8 million in 2006, dropping to $47 million in 2014.
