Churchill Downs Terre Haute Casino Can’t Proceed Because of Ongoing Appeal

Posted on: November 18, 2021, 06:48h. 

Last updated on: November 18, 2021, 09:47h.

Steve Bittenbender Read More
Expertise: Legislation, Sports Betting, Horse Racing.

INDIANAPOLIS – The Indiana Gaming Commission has found the company it wants to operate the state’s newest casino. However, before Churchill Downs Incorporated can officially break ground on The Queen of Terre Haute, the regulatory agency must win a case before a state administrative law judge.

Hard Rock Terre Haute presentation
Hard Rock International COO Jon Lucas presents the company’s bid for the Terre Haute gaming license to the Indiana Gaming Commission. The company was slated to operate a casino under the previous license holder, whom the IGC chose not to renew in June. (Image: Casino.org)

That’s because the company that was previously selected for the Terre Haute casino is appealing the commission’s decision earlier this year to not renew its license.

Spectacle Entertainment was the lone bidder for the Terre Haute license in December 2019. That’s a month after Vigo County voters overwhelmingly approved a measure allowing a casino in the west central Indiana county.

At the time, the company surrendered one of the two licenses it held in Gary to open the door for Terre Haute. The license maneuvers, which led to a land-based casino in Gary for Spectacle and the opportunity in Terre Haute, were included in an expanded gaming bill state lawmakers passed in 2019.

Investigation Derails Spectacle

Spectacle was cofounded the year before by longtime gaming executive Rod Ratcliff and Terre Haute businessman Greg Gibson. However, just weeks after Spectacle applied for the Terre Haute license, the IGC began an investigation into the company.

That’s after it learned that Spectacle executives were accused of participating in an illegal campaign finance scheme. The investigation would eventually lead to Ratcliff and John Keeler, a former state lawmaker and Spectacle executive, losing their licenses. Keeler also faces federal charges.

The IGC investigation left Gibson alone to lead the Terre Haute project, which the commission approved in May 2020. However, the project floundered and construction never started. That led the commission to take the unusual step of not renewing the license for Gibson’s renamed Lucy Luck venture.

Gibson appealed that decision to the Indiana Office of Administrative Law Proceedings. An administrative law judge there has granted a stay on the IGC’s decision pending the outcome of the appeal hearing.

Settlement Offered and Counterproposal Planned

On Monday, the IGC rejected a proposed settlement by Gibson that would have returned the license to him. In return, Lucy Luck would have diluted Gibson’s interest in the company, paid out other minority investors, and an experienced gaming operator would have purchased the remaining shares. The proposal offered Hard Rock as an example of the type of gaming company it would try to attract.

Previously, Spectacle and then Lucy Luck proposed building a Hard Rock Rocksino casino. When Hard Rock filed its application for the Terre Haute license, it did bring in Gibson as a minority partner. However, the company made it clear that Gibson would not be involved in the casino operations.

At Monday’s meeting, the commission agreed to counter Gibson’s proposal. They offered him a refund of his $5 million casino license fee if he agreed to drop the appeal and not take other actions. That proposal was slated to be drafted after Wednesday’s hearing.

When commissioners asked about the possible settlement agreement during Hard Rock’s presentation, Hard Rock COO Jon Lucas said he spoke with Gibson, although he did not mention his name. He told the commission he was “confident” the settlement would be reached that would allow Hard Rock to get the license and develop the casino on the same property.

Hard Rock Remains Committed to Indiana

Commissioners declined to advance Hard Rock to the final round. Applicants needed four votes from the seven commissioners, who each announced their two recommendations to advance. Churchill and Full House received six each, while Hard Rock received just two votes.

“While we are disappointed that Hard Rock is not listed as a finalist in the Terre Haute casino project, we remain steadfast in our respect for the selection process and committed corporate citizens elsewhere in the state of Indiana,” Lucas said in a statement to Casino.org after the meeting.

Hard Rock operates Hard Rock Northern Indiana, the land-based Gary casino Spectacle sought. The company owned by the Seminole Tribe of Florida bought the majority stake in the casino this summer to keep that license from not being renewed.

Hard Rock Northern Indiana opened in May and has quickly become one of the state’s top gaming attractions. It posted the highest adjusted gaming revenues in October, according to IGC’s monthly report.

A spokesperson declined to answer whether Hard Rock was still committed to working with Gibson should his appeal succeed.

A message sent after the meeting to a lawyer representing Gibson was not returned.

Terre Haute Leaders Backed Hard Rock Plan

Gibson’s involvement helped drum up support from Terre Haute and Vigo County political leaders, and it was the only proposal to get a resolution of support from the Vigo County Council. While that was a factor the IGC considered in Wednesday’s award decision, it was not a prerequisite.

Terre Haute Mayor Duke Bennett told Casino.org after the meeting that he was surprised and a little disappointed by the outcome.

Hard Rock’s brand… that’s been the driving force the whole time,” he said. “And then having a local guy, being a minority owner was really perfect for us because he already gives back so much in the community anyway. We knew he’d be able to do it even in bigger way with this casino.”

Based on the presentations and what he saw at the hearing, Bennett doubts there’d be any chance for a Hard Rock casino now. But he added he wasn’t sure if there would be any push in the community to get Gibson to settle so the casino project could move forward.

“I don’t know what he’s going to do,” the mayor told Casino.org. “I know he’s just really disappointed the way it’s all played out, no question. I’ve had several conversations with him over time, but I don’t get into his business, per se. It just seems like it’s been a very bumpy road for a long time, and he wants closure, too. And I think he was hoping, obviously, that would be closure with Hard Rock.

“But that’s just got to get resolved. They just need to get that behind everybody.”

Appeals Process

How long the appeals process will take through the Office of Administrative Law remains uncertain. It also may not be the last step.

According to the process, either party can ask for a judge to review the decision rendered by the administrative law judge. If that were to happen, it would take place in a court in Marion County, where the state capital of Indianapolis is based.

A hearing was set to take place on Tuesday. But that was postponed until Dec. 3.