Spectacle Investigation Scope Expanded, Indiana May Act Within 30 Days
Posted on: November 23, 2020, 09:53h.Last updated on: November 23, 2020, 09:53h.
The scope of the Indiana Gaming Commission’s investigation into Spectacle Entertainment has widened, Executive Director Sara Gonso Tait told commissioners Monday. As a result, the company that operates the Majestic Star Casinos and is building a $300 million land-based replacement in Gary with Hard Rock International is in jeopardy of losing its license.
An investigation that began in January on federal charges of campaign finance laws against a Spectacle executive mushroomed in May, Tait said. That’s when the IGC learned of allegations of Indiana Riverboat Gambling Act violations.
Now, the IGC’s investigation covers more than 10 subjects, she said. Those individuals either currently hold licenses with Spectacle, held a license with the company, or maintained a license with Centaur Gaming. Centaur was a predecessor entity run by Spectacle executives. Their ability to hold gaming licenses is now “in serious doubt,” Tait said
Some of the documents IGC staff obtained came after John Keeler’s indictment on federal campaign election finance violations in September. Keeler served as Spectacle’s vice president and general counsel and served Centaur in the same capacity.
Commissioners Want to Act Soon
Tait’s report seemed like more than enough for commissioners, who sounded ready Monday to move the case forward. When asked if IGC staff had contacted the casino’s trustee-in-waiting, Tait said that had not happened.
“Perhaps it’s time to do that,” IGC Chairman Michael McMains said.
The trustee-in-waiting oversees a casino’s operations until a new operator can purchase it. Spectacle’s trustee-in-waiting is Tom Dingman. He’s a gaming industry consultant who served as a Harrah’s executive for 25 years. He also served as the COO and general manager for the Indiana Grand from December 2011 to February 2013. His tenure there came prior to Centaur owning the property.
“I would say maybe within the next two weeks to 30 days, we need to have something in our hands that gives us some level of comfort that this operator is either going to be with us or going to be gone,” Commissioner Susan Williams said.
Spectacle CEO: “Plan of Action” Coming Soon
Tait noted that IGC investigators have conducted 29 interviews with current and former licensees, Tait said. Three individuals declined interview requests. The Commission has also reviewed about 1,000 documents as well.
Tait noted that current Erpenbach and Spectacle Vice Chair Greg Gibson remain in good standing and have cooperated.
In a statement to Casino.org, Spectacle said the company has been gathering information the IGC requested. The company continues to rebuild its controls and overhaul the organization.
“From the beginning, we have taken this matter very seriously, as we share the Commission’s objective of protecting the integrity of gaming in the state,” Erpenbach said. “Spectacle will continue to cooperate fully with the Commission and will be presenting its plan of action to the Commission in the near future.”
Spectacle Investigation Recap
The Spectacle Entertainment investigation started in late January. That was just a couple weeks after executives from the Indianapolis-based gaming company, Hard Rock, and officials from the Gary area celebrated the groundbreaking for Hard Rock Northern Indiana.
At that time, IGC became aware of a federal court case in Virginia that implicated Centaur Gaming officials. That case involved a political consultant who pleaded guilty to election finance charges. Charles O’Neil found individuals to contribute to an Indiana congressional candidate. He repaid those individuals with funds received from a company unnamed in court documents but later identified as Centaur. Another consultant pleaded guilty in the case as well.
The IGC investigation led to a delay in approving another Spectacle-Hard Rock casino application in Terre Haute.
Eventually, Keeler and Spectacle Founder, CEO, and Chair Rod Ratcliff had to divest themselves from the Terre Haute project in order for the Commission to approve it in May. Ratcliff was also the founder of Centaur Gaming, which owned Harrah’s Hoosier Park and bought Indiana Grand in 2013. Centaur sold those properties to Caesars Entertainment, leading Ratcliff to create Spectacle, which purchased the Majestic Star.
Three weeks after the IGC received word of the additional allegations in late May, Ratcliff quietly stepped down from his leadership positions to focus on investor relations for the company. That did not become public until the company announced Jahnae Erpenbach succeeded him as chair and CEO in late September. At the time of Erpenbach’s announcement, Tait said the Commission prohibited Ratcliff from exerting any management control over the company.
Also in late September, a federal grand jury indicted Keeler along with former state Sen. Brent Waltz, the congressional candidate, for their alleged roles in the illegal contributions scheme. The Commission suspended Keeler’s gaming license immediately after his indictment.
Hard Rock Northern Indiana remains under construction with a planned opening for early 2021. Earlier this month, the casino held hiring sessions to identify dealers for table games. Hard Rock International officials also continue to reiterate their support for the project.