As the next step in what could be the purchase of Caesars Southern Indiana, the Eastern Band of Cherokee Indians Tribal Council approved funding November 12 to pay $500,000 for due diligence.
The property opened in 1998 outside Elizabeth, Indiana under the name Caesars Indiana and includes a 503-room hotel and 110,000 square feet of gaming space with table games, a sportsbook, and 1,650 slot machines.
“The tribe and Caesars Entertainment, Inc. have signed a letter of intent expressing the desire to potentially purchase the Southern Indiana casino being sold by Caesars if the parties can agree on terms for the transaction… the letter of intent states that for 45 days from the date Caesars signed the letter, Caesars will work exclusively with the tribe regarding the potential transaction and will not entertain offers from other potential buyers,” the council said in a statement.
The tribe will also incur $10.1 million for regulatory licensing fees, debt financing fees, insurance and other costs, $150,000 for legal counsel and $1.5 million for monthly invoices for work performed by a law firm through the date of closing of the purchase.
During discussion on the issue at a November 12 meeting, Principal Chief Richard Sneed said the tribe is buying cash flow, a business with a known return, according to One Feather.
“The vetting process includes a major audit of their books. We’ve been shown the books, but we will actually have an outside auditor. So, part of that due diligence is to get an outside audit before the purchase,” Sneed said.
Yellowhill Rep. Tom Wahnetah said the due diligence is designed to ensure the property lives up to its owners claim before buying, kick the tires so to speak. “I think this is a good start to make sure that we don’t make a bad decision on this property if we decide to buy it,” he said.
According to Chief Sneed, this is a new approach for the tribe, which is used to building something from the ground up. “We’ve never had to go through this process before because we’ve never acquired an existing casino before.”
Sneed noted that the tribe has had a “monopolistic run for 23 years” with its gaming enterprise and spoke of the need for more revenue diversification.
“We’ve had 23 years of all upside…We’re looking for long-term stability and sustainability and being able to fund these programs in perpetuity.”
In other Indiana news, Hard Rock is hiring hundreds of people for the new Gary site, even as the continuing Covid-19 pandemic has put the opening date in jeopardy.
CBS 2 Morning Insider Tim McNicholas took a tour of the $300 million project.
“It’s incredibly important,” said Matt Schuffert, president of the Hard Rock Casino Northern Indiana. “There’s a lot of folks…looking for the opportunity to get back to work. And by building this facility, we’ve got a lot of opportunities for people to come and join and our team.”
The Majestic Star casino in Gary will close, and those employees will transfer to Hard Rock. The company also expects to hire about 800 new employees. Hard Rock held job fairs in November with more to be scheduled in January.
The casino is preparing to separate slot machines, social distance food and beverage outlets, and imposes a limit on the number of table games and number of people at each game. Depending on the status of the Covid-19 virus on opening, team members will be required to pass a temperature check and employees and guests will don masks.
“It’s hard to speculate and say what the spring is going to look like, but obviously we’ll pay attention to whatever is going on from a pandemic, regulatory perspective,” Schuffert said.
