Hard Rock Northern Indiana Gets Much-Needed Certainty After Spectacle
Posted on: August 22, 2021, 04:58h.
Last updated on: August 22, 2021, 05:04h.
After months of hearings, orders, and discussions, Hard Rock Northern Indiana’s ownership issues have been settled. Florida-based Hard Rock International is taking control of the state’s newest casino from its partner in the venture, a company that has been mired in an ongoing investigation for more than 18 months.
On Wednesday, the Indiana Gaming Commission signed off on a plan that made the gaming operator the majority owner for the $300 million casino in Gary.
Officials from Hard Rock presented their plan reached after ongoing discussions with Spectacle Entertainment. That presentation came two years after Spectacle made its first presentation to the state gaming authority the companies’ plans.
However, since January 2020, Spectacle has been the target of a massive IGC investigation that has uncovered several violations of state gaming regulations as well as federal laws. It’s led to one former Spectacle executive facing federal charges for campaign finance violations and its founder – a longtime fixture in Indiana gaming – surrendering his gaming license.
Two months ago, the commission threatened to not renew the license on the casino – a step it took at the same meeting with the Terre Haute licensee also involved in Spectacle Entertainment. However, the commission tabled that decision because the Gary casino was operational. State officials implored Spectacle and Hard Rock representatives to reach an agreement that would keep the state from taking that action.
Hard Rock Takes Over in Northern Indiana
Under the plan, the Gary casino’s corporate officers are now all current Hard Rock International executives, will no Spectacle management involved. Meanwhile, its board consists of Hard Rock appointees and an independent member approved by the IGC.
After initially entering into the partnership as the majority partner, what’s left of Spectacle now will hold less than 15 percent interest in the project. Hard Rock officials told the state that Spectacle’s ownership will be akin to an “institutional investor,” which means it would have little – if any – say in operational matters.
Attempts to reach Greg Gibson, a co-founder of Spectacle Entertainment and currently its vice-chair on the company’s website, were unsuccessful. Gibson also led Lucy Luck, the venture denied the Terre Haute license renewal earlier this year.
Hard Rock had agreed to partner with Lucy Luck and operate a Hard Rock Rocksino in Terre Haute.
The IGC is taking applications for the Terre Haute license through Sept. 22. When asked if Hard Rock was still interested in that project or the ongoing solicitation for the Chicago solicitation, a Hard Rock executive issued a statement expressing its support for the northern Indiana casino.
Hard Rock International remains a committed corporate citizen to the city of Gary and welcomes the opportunity to grow our interest in the Northern Indiana region,” Hard Rock International COO Jon Lucas told Casino.org after the IGC meeting.
The financial details of the transaction were not announced.
Spectacle Investigation Led to Stoppage
The investigation impacted Hard Rock Northern Indiana in other ways as well.
From November to March, the IGC put a stop on transferring assets from the Majestic Star boats to the Hard Rock location. Executive Director Sara Gonso Tait said concerns about Spectacle’s viability and its inadequate response to the investigation prompted the action.
As that stoppage took place, Spectacle was fined $530,000 for not ending its relationship with Ratcliff.
Hard Rock eventually held its grand opening in May.
Since its opening, Hard Rock has become one of the top revenue-generating casinos in Indiana, with its location right off a major expressway in Gary and just minutes away from Chicago’s southern suburbs.
According to the presentation before the IGC on Wednesday, the casino is averaging nearly $1 million in revenue per day for its first 79 days in operation. Hard Rock’s research also indicated that most of that gross gaming revenue is being generated through new customers coming into the market and not absorbing players from other casinos in northwest Indiana.
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