Terre Haute businessman Greg Gibson, a principal investor in a group that intends to acquire two Gary-based Indiana casino licenses, says Terre Haute tops his list of potential locations.
Gibson, along with Rod Ratcliff, former chairman and CEO of Centaur Gaming, are the lead owners of Spectacle Entertainment, formed on March 2.
Moving a second license to Terre Haute is something Gibson finds appealing, he told the Tribune-Star on Thursday.
“Certainly, Terre Haute is home for me, and certainly having the option of moving a casino license to Vigo County appeals to me. Our community is at the heart of about every decision I make,” Gibson said.
“That said, I really see this an opportunity to help Indiana’s overall economy. It sure doesn’t seem prudent to me to have two aging facilities operating side by side in Gary. It makes sense to move these licenses for the betterment of the entire state.
“I do trust that my home community will step up and try to make a case to be considered for a license,” Gibson said.
“And I believe that many people in the Terre Haute community have wanted a casino for a long time, and I think that desire is still there.
“At the end of the day, I do believe that our state officials, Spectacle Entertainment and my partners, we can work together to pursue the best opportunity for Indiana’s economy,” he said.
A convention center is a separate project now underway in Terre Haute, a project which Gibson has spurred by donating property in the city’s downtown.
“The convention center is going no matter what,” he said. [The casino and convention center] are two separate projects. There are no guarantees on this gaming opportunity,” he said.
“We can’t stand idle and ignore the competition other states are pursuing; instead we must be timely and nimble. Indiana is home and I want to see it thrive,” Gibson said in a separate, company news release.
Merger needs approval
Spectacle Entertainment announced Wednesday it will merge with Majestic Holdco LLC (“Majestic Holdco”) in a cash transaction. Majestic Holdco sold Majestic Mississippi LLC, the owner and operator of a casino and hotel in Tunica, Mississippi, to Foundation Gaming Group in August 2018.
Majestic Holdco owns the The Majestic Star Casino and The Majestic Star Casino II, both of which are included in the sale. Both casinos are currently located in Buffington Harbor in Gary, but that city is seeking to relocate the casinos, moving them inland within the city.
In October, city of Gary officials told an Indiana General Assembly’s study committee that the city’s hopes of becoming a transportation and logistics hub hinge on the Majestic Star casinos being permitted to relocate from the lakefront to a new site, preferably adjacent to a Borman Expressway exit, the Times of Northwest Indiana reported.
The move is needed for the city to have enough land at Buffington Harbor for a long-term redevelopment project, including a facility for shipping via water, rail, highway and air.
The transaction is subject to regulatory approval and is expected to close in the first quarter of 2019.
John Keller, general counsel for Spectacle Entertainment, said the next step is for Spectacle Entertainment to get approval from the Indiana Gaming Commission.
“We have to file a transfer application for each license. That is a pretty detailed process that we hope to complete by the end of next week,” Keeler said Thursday.
The gaming commission staff will then perform an investigation of the company and its members. A recommendation is then made to the gaming commission, a seven-member body appointed by the governor. The commission “will make the ultimate decision of whether they approve the transfer or not. That is the first step,” Keeler said.
Current state law states that both casino licenses are to be located in Gary on Lake Michigan.
“It is Spectacle’s hope that in regard to one license, the [Indiana] legislature permits it to be located anywhere in the city limits of Gary,” Keeler said. “With regard to the second license, it is Spectacle’s hope to move it out of Gary,” he said. “That will be up to the Indiana General Assembly to decide if and how and when that process takes place.”
Relocating a casino is not something that is common for Indiana. While ownership transfers are common, no license has been relocated within the state since the mid 1990s, with the exception of French Lick Casino. In 1993, a riverboat license was assigned to Patoka Lake reservoir, but later taken over by the state.
“When that happened, the form of the license changed to something that was owned by the state, so the state owns the French Lick license,” Keeler said.
Possible obstacles
Indiana gaming analyst Ed Feigenbaum, editor of Indiana Gaming Insight, said having a potential option to move a second license “elsewhere is a huge thing.”
“That second license in a different location could be worth many hundreds of millions of dollars to them over a period of time if they were to move that second license and operate with that second license — or if they are granted the ability to convey that license to a second operator — they could get a windfall up front from that second license,” Feigenbaum said.
Feigenbaum said moving a Majestic Star Casino site would face obstacles, including opposition from some other casino operators and state representatives with casinos in their legislative districts.
“Any kind of potential move to Terre Haute would probably be viewed askance by the legislators that are favorable toward the French Lick Casino… and opposition form Evansville,” Feigenbaum said.
If the license is moved, legislators may determine the license should be up for bid, but that could lead to many other entities seeking change, he said.
“Any time there is a change in the way you regulate and license the casinos ... it is almost like putting pressure on one part of a bicycle tire. You patch something up and it explodes somewhere else. Everyone wants something in exchange for giving up something,” Feigenbaum said.
Officials for Spectacle Entertainment say a move would benefit the entire state.
Rod Ratcliff, Spectacle’s chairman and CEO, in a company release said the acquisition of the two gaming licenses located in Gary presents a tremendous economic opportunity “for the City of Gary as well as the state of Indiana. We welcome the prospect of working with Gary and the General Assembly to maximize the value of these two licenses by allowing Buffington Harbor to become part of an intermodal hub, creating additional employment and increasing state and local tax revenues.”
If Spectacle does intend to move a casino license to Terre Haute, it would take action by the state legislature.
In December 2016, Indiana Sen. Jon Ford, R-Terre Haute, filed legislation to move 750 gaming positions from the casino, located in Rising Sun along Indiana’s southeastern border near Cincinnati, into a new $100 million to $150 million casino in Terre Haute. The legislation died in committee.
Contacted Thursday, Ford said the experience convinced him any casino discussion should involve a public referendum.
“I think people in Terre Haute should have a right to voice their opinion,” Ford said. “We would have to see what the effort is, and if it had a referendum, I would be open to it,” Ford said.
“That is something I kinda learned out of that process. I probably made a mistake in 2016” in not factoring in a referendum, Ford said.
A clear message from the community would make a Terre Haute casino license more palatable in Indiana General Assembly, Ford said.
Gibson: ‘It’s time’
Gibson admits he has no experience in the gaming industry, but that’s also a factor in pairing with Ratcliff.
“I have known Rod for many years. He is an expert in the gaming industry. Rod is actually from Parke County ... from Tangier,” Gibson said. “Long ago, Rod drove a coal truck for my dad [Max],” he said of the former Gibson Coal Co.
Gibson said Spectacle Entertainment has several hurdles to tackle.
“And some of them are high ones,” Gibson said. “This is not going to be easy, and there will be some challenging months ahead, I think. But that said, it is time for the state to make some decisions and try to complete some revitalization of the gaming industry in Indiana.”
“It is my personal belief that Terre Haute should have been considered for a license when we first passed the gaming laws,” Gibson said. “We are a huge retail area for eastern Illinois. We want to focus on bringing people from outside our state to come in and spend money,” he said, including an area from Danville, Illinois, east to Terre Haute.