Majestic Star Casinos
In the two years since Don Barden bought out Trump Casino, state admission and wagering tax revenues for the two Gary riverboats have fallen 14 percent, from $80.7 million to $70.6 million. And since 2001, attendance at the two riverboats is down roughly 5 percent, compared to a 36 percent average increase in patrons for Indiana's eight other floating casinos.
Barden has yet to deliver the new hotel and entertainment center promised when he bought Trump Casino in 2005. But this summer he told the Indiana Gaming Commission he would invest $200 million at Buffington Harbor during the next two years.
INDIANAPOLIS | The riches forecast for Gary when Don Barden bought Trump Casino two years ago have yet to sail into Buffington Harbor.
Instead, Barden's two Majestic Star Casinos sunk lower at a time when competitors in East Chicago, Hammond and Michigan City were raking in more cash and floating expansion plans.
Barden, a Detroit business mogul whose interests include casinos in Colorado, Mississippi and Las Vegas, recently reiterated his desire to reinvest in Gary. But he has yet to deliver the 300-room hotel and entertainment center promised when his $253 million acquisition of Trump Casino closed in late 2005.
The delay has fueled political squabbles in the Steel City, with Gary Councilman Roy Pratt leading an unsuccessful campaign to commandeer one of Barden's casino permits. The Indiana Gaming Commission renewed both licenses in June, and it was unmoved by a revocation plea Pratt made at a hearing earlier this month.
"He's getting his licenses, but he hasn't lived up to all the obligations that he needed to do. He gains, but the city of Gary loses with him running the two licenses," Pratt said. "It's obvious we're losing money."
Combined gaming revenues for the two Gary riverboats have declined 14 percent since Barden bought out Trump. The two casinos generated $70.6 million in admission and wagering taxes in the state fiscal year that ended in June, down from $80.7 million two years earlier.
At the same time, Horseshoe Casino, which is building a new $485 million casino in Hammond, increased revenues by 9 percent, paying $152.9 million in gaming taxes last year. And Blue Chip Casino saw even stronger gains after cutting the ribbon on a new $170 million Michigan City riverboat last year.
Barden blames former Gary Mayor Scott King for stalling access road improvements linked to the Buffington Harbor expansion plans discussed two year ago. But he says his relationship with the city has improved since Rudy Clay became mayor last year.
"We're getting along fine," Barden told The Times. "But we still have to find a way to get the infrastructure completed. I think Mayor Clay is beginning to understand the dynamics, now that he has some experience and time on the job. And I think we will work things out."
Barden told the Gaming Commission he has hired architects and engineers to revisit Majestic Star expansion plans. And in late May or early June, while his license renewals were under review, he promised the commission he would invest $200 million during the next two years.
"I have every bit of confidence that Mr. Barden's vision is to have a new vessel there," said Ernie Yelton, executive director of the Gaming Commission. "The process for him to accomplish that is unfolding very slowly."
The Gaming Commission asked Barden to begin submitting quarterly financial reports this month, after reviewing a six-year economic analysis that showed the Gary casinos have failed to keep pace with the industry.
Attendance at the two riverboats fell roughly 5 percent since 2001 while Indiana's eight other floating casinos were, on average, attracting 37 percent more patrons. And the growth in Majestic Star's wagering taxes also fell well below the industry average. Meanwhile, the economic development subsidies flowing from the casinos to the city of Gary shrank from nearly $12 million the last year Trump was in business to $6 million last fiscal year.
Barden argues Gary only needs one riverboat license, and this spring he reportedly asked legislators to consider a lucrative deal to relocate one of his licenses.
State Rep. Charlie Brown, D-Gary, says Barden must make good on his promise to invest in Buffington Harbor before lawmakers or the public would support such a move.
"There is concern that there isn't a written proposal from Mr. Barden regarding the future plans for Buffington Harbor, and I think it would be in his best interest and in the city's best interest if there is such a proposal presented," Brown said. "He's going to have to show a strong commitment to Gary before there's going to be any consideration for him moving one of these licenses."
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