Spectacle Entertainment Could Lose Indiana Gaming License After Feds Indict Executive

Posted on: September 30, 2020, 04:11h. 

Last updated on: October 3, 2020, 07:51h.

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

Spectacle Entertainment faces an uncertain future as a casino operator in the state after John Keeler, its vice president and general counsel, had his license suspended by the Indiana Gaming Commission (IGC). The suspension stemmed from his indictment on federal campaign election law violations.

Spectacle Indiana Gaming
Spectacle Entertainment Vice President and General Counsel John Keeler gives a presentation on the Hard Rock casino project to the Indiana Gaming Commission at its August 2019 meeting. (Image: Casino.org)

The Indianapolis-based company operates the Majestic Star Casino in Gary and received permission less than a year ago to move inland in the Rust Belt town. The inland casino, a $300 million development in partnership with Hard Rock International, is currently under construction.

This matter is extremely serious,” IGC Executive Director Sara Gonso Tait said in a statement. “The ability for this company to continue to hold an Indiana gaming license is in question.  The remaining Board of Managers have urgent questions to answer.”

The emergency suspension of John Keeler’s occupational license came the same day the Spectacle Entertainment vice president and general counsel appeared via teleconference in an Indiana federal court on charges of campaign finance law violations.

The IGC has had Spectacle under investigation since January. The investigation started after it learned that executives, including Keeler, who served at a predecessor company to Spectacle, were connected to a scheme from five years ago. In that plan, they used corporate funds to reimburse contributors to a candidate for a Congressional seat in Indiana.

That candidate, Brent Waltz, was also indicted in the case.

Spectacle announced Tuesday that Keeler, 71, took administrative leave after being charged in the case. His profile page has been removed from Spectacle Entertainment’s website.

“It is important to remember that Mr. Keeler is presumed innocent of all charges,” the company’s statement read. “Spectacle Entertainment will have no further comment at this time.”

Bogus Invoices Covered Campaign Contribution

Keeler’s indictment shed additional light on the scheme federal authorities claim he and two political consultants to Waltz orchestrated. It dates back to when Keeler was the vice president of New Centaur LLC, known as Centaur Gaming, and a previous owner of Indiana’s two racetracks.

In April 2015, authorities allege Kelley Rogers, one of Waltz’s consultants, met with an unnamed Centaur executive at the Indianapolis airport, and an agreement was reached for the gaming company to contribute to the campaign.

“The New Centaur, LLC executive, and Rogers agreed that Rogers would create fake invoices and send them to New Centaur, LLC to provide cover for the corporate contributions and disguise the transfers of money as payment for legitimate services,” the indictment stated.

After that meeting, Rogers informed Keeler, who also served as Centaur’s vice president and general counsel, he would send bogus invoices. The two bills totaled $79,500.

By September, Rogers and Charles “Chip” O’Neil identified nine people to donate $2,700 to the Waltz campaign and pledged to reimburse them. In addition, Rogers and O’Neil also contributed $2,700 each and reimbursed themselves with the Centaur money.

Waltz, 47, then allegedly received $10,800 of the money, which he used to reimburse four other straw donors. Rogers pocketed the remaining $33,300 for his work on the campaign.

To say the allegations outlined in the court documents are disappointing is a vast understatement,” Tait said. “Mr. Keeler’s indictment and the separate suitability matters under investigation by our agency create an unprecedented set of negative circumstances.”

Rogers and O’Neil were previously indicted and pleaded guilty in a federal court in Virginia. O’Neil received a sentence of six months home detention and a year of probation in July. In January, Rogers, whose case involved additional political campaigns, received a three-year sentence and was ordered to pay restitution totaling more than $490,000.

Centaur Leaders Formed Spectacle

In 2018, Centaur sold the two Indiana tracks to Caesars Entertainment. Rod Ratcliff, the chairman and CEO of Centaur, then formed Spectacle with the purpose of buying the Majestic Star. The 2019 expanded gaming law passed by the legislature allowed Spectacle to move inland.

Because it has two boats, the Majestic Star has operated under two licenses. The law required Spectacle to surrender one of the licenses, which was then awarded to Terre Haute. Voters in Vigo County overwhelmingly approved a referendum last November to allow casino gaming in the county.

In December, Spectacle submitted the only application to Indiana officials for that license.

In January, less than three weeks after Spectacle and Hard Rock leaders celebrated with Gary, Indiana officials at the groundbreaking for Hard Rock Northern Indiana, the IGC announced it was investigating Spectacle after it was made aware of the federal investigation.

The announcement forced a more than three-month delay on a hearing to approve the Terre Haute license. The IGC only did so in May after Ratcliff and Keeler divested themselves from the company known as Spectacle Jack. Commission members noted that the application would not have been approved without the changes.

Spectacle Jack is not a subsidiary of Spectacle Entertainment. However, Spectacle Jack Chairman Greg Gibson continues to serve as the vice-chair for Spectacle Entertainment.

In June, Ratcliff quietly retired from his positions as CEO, board member, and board chair of Spectacle Entertainment. However, the company said the longtime Indiana gaming figure maintains an ownership stake and oversees investor relations.

Last week, Tait said that Ratcliff was no longer authorized to “exert any control” over the casino.

Indiana Gaming Officials Still Reviewing Spectacle

Federal prosecutors declined to detain Keeler after Tuesday’s hearing. He did surrender his passport, and the court required him to remove any firearms from his home.

The judge set a trial date of Nov. 30 for Keeler and Waltz.

Meanwhile, the Indiana Gaming Commission’s investigation into Spectacle Entertainment and Spectacle Gary continues.

“We’re evaluating all necessary and potential next steps as a result of today’s announcement,” Tait said in her statement Tuesday. “Separate from the criminal matters announced today, the IGC commenced its own suitability investigation concerning Spectacle Entertainment Group and former Centaur Gaming key persons.  The IGC’s investigation is ongoing and when appropriate, information will be presented at a public meeting.”