Owners of Margaritaville Resort-Casino in Shreveport, Louisiana recently announced the property will not be sold to the Poarch Band of Creek Indians based in Alabama. The cancellation of the 5 million sale, originally announced in June, was mutual.
The reason given was that Bossier Casino Venture, the Poarch Band’s casino operating company, expected to operate the casino under its Wind Creek brand, not the Margaritaville brand. The Poarch Band’s proposal to buy the casino-hotel was contingent on the property being “free and clear” of any Margaritaville-related licensing obligations.
However, a dispute arose between BCV and Margaritaville Holdings LLC over license fees based on sales at a minimum of $5 million a year. BCV stated it could exit the agreement at any time, provided that it made a $10 million payment, equivalent to two years’ worth of minimum license payments. Margaritaville “strongly disagreed” and alleged BCV breached the agreement by failing to pay quarterly fees.
Both companies have been involved in arbitration for more than a year. Following hearings in January and February, in March, the arbitration panel concluded Margaritaville was entitled to monetary damages because BCV failed to pay license fees. BCV said it would pay Margaritaville $10 million, or two years of license fees, plus interest; then it would have no further obligation to make any future license payments of any type to Margaritaville for the remainder of the term of the agreement between them.
BCV Chief Executive Officer Paul Alanis said, “BCV is pleased to have satisfied in full its financial obligation to Margaritaville and to continue using the Margaritaville brand without further financial obligation for future license fee payments. BCV is committed to continuing to provide a first-class gaming and entertainment experience to its loyal customers under the Margaritaville brand.”
The sale would have resulted in the first Indian-owned casino in the Shreveport-Bossier market. Three land-based Indian-owned casinos operate in central and south Louisiana.
