Spectacle Entertainment, formed in March by Terre Haute, Indiana businessman Greg Gibson and Rod Ratcliff, former chairman and chief executive officer of Centaur Gaming, announced it will merge with Majestic Holdco LLC for an unspecified amount of cash. Majestic Holdco owns the Majestic Star Casino and the Majestic Star Casino II, both located in Buffington Harbor in Gary, Indiana. The city wants to relocate the riverboat casinos as it pursues a transportation and logistics hub at the current location. The merger is expected to close in first quarter 2019, pending regulatory approval.
Spectacle Entertainment General Counsel John Keeler said, “We have to file a transfer application with the Indiana Gaming Commission for each license. That is a pretty detailed process that we hope to complete” soon. The gaming commission staff will then perform an investigation of the company and its members, followed by recommendation. The commission “will make the ultimate decision of whether they approve the transfer or not. That is the first step,” Keeler said.
Current state law requires both casino licenses to be located in Gary on Lake Michigan. But, Keeler said, “It is Spectacle’s hope that in regard to one license, the Indiana legislature permits it to be located anywhere in the city limits of Gary. With regard to the second license, it is Spectacle’s hope to move it out of Gary. That will be up to the Indiana General Assembly to decide if and how and when that process takes place.”
Gibson said he’d like to move the second casino license to Terre Haute. “Certainly, Terre Haute is home for me, and certainly having the option of moving a casino license to Vigo County appeals to me. Our community is at the heart of about every decision I make. That said, I really see this as an opportunity to help Indiana’s overall economy. It sure doesn’t seem prudent to me to have two aging facilities operating side by side in Gary. It makes sense to move these licenses for the betterment of the entire state. I do trust that my home community will step up and try to make a case to be considered for a license,” Gibson said.
He added Spectacle Entertainment has several hurdles to overcome, and “some of them are high ones. This is not going to be easy, and there will be some challenging months ahead, I think. But that said, it is time for the state to make some decisions and try to complete some revitalization of the gaming industry in Indiana.”
Indiana gaming analyst Ed Feigenbaum, editor of Indiana Gaming Insight, said moving a second casino license “is a huge thing. That second license in a different location could be worth many hundreds of millions of dollars to them over a period of time if they were to move that second license and operate with that second license, or if they are granted the ability to convey that license to a second operator, they could get a windfall up front from that second license.”
Feigenbaum noted state legislators who represent districts with casinos could oppose moving a Majestic Star Casino site. “Any kind of potential move to Terre Haute would probably be viewed askance by the legislators that are favorable toward the French Lick Casino, and opposition from Evansville,” Feigenbaum said. He added if the license is moved, lawmakers may determine it should go up for bid, which could have a domino effect.
“Any time there is a change in the way you regulate and license the casinos it is almost like putting pressure on one part of a bicycle tire. You patch something up and it explodes somewhere else. Everyone wants something in exchange for giving up something,” Feigenbaum said.
Operators of northwestern Indiana’s five existing casinos already are expressing opposition to the suggestion of moving a Majestic Casino license. Horseshoe Hammond Senior Vice President and General Manager Dan Nita the operators have invested in their properties because they could count on the stability of the state’s legislation. “We knew casino operators could do what they wanted, provided it was on their footprint,” Nita said.
Hammond Mayor Thomas McDermott, Jr., has said his city should get a second license because it’s the region’s largest city. He stated he would like to see Horseshoe build a hotel on its current footprint. “If I say we would build a hotel if the rules stay the same, what if it comes up again in two years. There’s a very good likelihood capital investment at casinos could stop with the uncertainty,” Nita said.
Feigenbaum noted that already has happened—for example, when then-owner Pinnacle Entertainment cancelled a $35 million third hotel tower at its Belterra casino right after the legislature agreed to allow a racino to open.
