Casino operator Caesars Entertainment has finally managed to make nice with Indiana gaming regulators, but this peace came at a seven-figure cost.
Last November, Caesars announced a $1.7b deal to acquire Centaur Entertainment’s two Indiana racinos – the Hoosier Park in Anderson and the Indiana Grand in Shelbyville. But the company pitched a fit when the Indiana Gaming Commission (IGC) demanded a $50m fee for the transfer of ownership.
Under Indiana gaming law, the initial owner of a gaming venue must pay a transfer fee when a controlling interest in the property is sold. Caesars argued that Centaur had acquired the two venues after their original owners declared bankruptcy, a condition that allows the transfer fee to be waived. The IGC respectfully disagreed with Caesars’ read of the rules, leaving the acquisition in doubt.
On Tuesday, the Indianapolis Business Journal reported that the parties involved had worked out a deal under which Hoosier Park or its affiliates would pay the transfer fee before or at the deal’s closing. On Thursday, the IGC formally signed off on Caesars’ acquisition of the two gaming venues.
However, back when Caesars was still objecting to the fee, it had warned the IGC that the company might be — hint, hint — forced to scrap its planned $90m construction of a land-based facility to which it hoped to relocate the gaming operations of its Horseshoe Southern Indiana riverboat casino.
The IGC didn’t appreciate Caesars’ not-so-veiled threats but went ahead and approved the relocation plan in April. However, on Thursday the IGC announced that it had imposed a $1m fine on Caesars for engaging in “an inappropriate effort to influence commission action by leveraging the Southern Indiana project.”
Clearly anxious to put the whole mess behind them, Caesars chief regulatory compliance officer Sue Carletta said the company “recognize[d] and accept[s] full responsibility for the matters that led to the settlement.” Carletta added that Caesars just wanted to “move forward in a positive manner.”
The Centaur acquisition brings Caesars’ total Indiana footprint to four venues, including the aforementioned Southern Indiana casino and the Horseshoe Hammond.