Top Indiana Gaming Official to Step Down, Oversaw Massive Spectacle Probe
Posted on: August 22, 2021, 05:02h.
Last updated on: August 22, 2021, 10:13h.
Sara Gonso Tait will step down as the executive director of the Indiana Gaming Commission, Gov. Eric Holcomb announced on Friday.
Tait was appointed to the position that oversees the day-to-day operations of the commission by then-Gov. Mike Pence in June 2015. Before she succeeded Ernest Yellon, she served a year as the commission’s general counsel and just recently celebrated her 10th anniversary with the agency.
A release from the governor’s office said Tait was stepping down, effective Sept. 10, to look for opportunities in the private sector.
As executive director, Sara demonstrated a strategic vision for the Indiana Gaming Commission that delivered strong results in economic development while maintaining the highest level of integrity,” Holcomb said in a statement. “Her leadership and innovation has made a positive impact on the state of Indiana that will continue beyond her time at the Indiana Gaming Commission.”
Holcomb also announced that Greg Small, who joined the IGC as general counsel six years ago this month, will serve as the new executive director effective Sept. 11.
Gaming in Indiana is a major economic engine in the state, as it generates more than $500 million annually in tax revenue. The state’s casinos, sportsbook operators, and other stakeholders create more than 12,000 jobs across the state.
“I leave the Indiana Gaming Commission having accomplished significant goals and confident that my tenure served the agency, industry, and state well,” said Tait. “This role has been more than I hoped for, and being the executive director has been a privilege and honor. I wouldn’t trade it for the world. I am truly appreciative of Gov. Holcomb and his office for the incredible support, trust, and opportunity to grow.”
Busy Two-Year Period for Indiana Gaming
To say the last two years of Tait’s tenure at the Indiana Gaming Commission have been eventful would be an understatement.
The expanded gaming bill lawmakers passed two years ago took effect on July 1, 2019. Less than two months later, the IGC passed emergency regulations for sports betting, with the first retail sportsbooks opening in early September.
That law, though, did more than just give Indiana sports betting. It also allowed for the riverboat casinos in Gary to move inland and opened a license for Terre Haute. (More on that shortly) It also sped up the process for the state’s racetracks to offer live-dealer table games.
She also worked on the negotiations with the Pokagon Band of Potawatomi Indians on a Class III gaming compact for the tribe’s South Bend casino – the first such compact for the state.
An agreement on the compact was reached in January, approved by state lawmakers in the spring, and accepted by federal officials on July 2. Earlier this month, Pokagon and Indiana leaders gathered to celebrate the official launch of table games at the casino.
Indiana also was one of the states significantly impacted by Eldorado Resorts’ acquisition of Caesars Entertainment. The state’s approval of that merger was initially contingent on the newly merged company selling three of its five properties.
Earlier this year, the commission voted to reduce the divestiture to two, and the transfer of the second casino – Caesars Southern Indiana – was approved earlier this week.
And, of course, there was the COVID-19 pandemic that gripped all gaming states. Indiana casinos were forced to close for three months, with casinos gradually expanding capacity over time.
Spectacle Investigation Leads to Ratcliff’s Ouster
However, the issue that has dominated Indiana gaming over the last 19 months has been the investigation into Spectacle Entertainment.
Stemming from a federal court case in Virginia regarding illegal campaign contributions, gaming commission officials learned that executives with Spectacle, who had previously worked at Centaur Gaming, were connected to a plan to funnel Centaur money to an Indiana congressional candidate in 2015.
The investigation has led to the indictment last fall of one former Spectacle executive, John Keeler. Keeler’s license was suspended, and he was as well.
It also led to the ouster earlier this year of Rod Ratcliff from the gaming industry, Ratcliff founded both Centaur and Spectacle, and was key to starting horse racing in the state. His involvement in gaming dates back 30 years, to when casino gaming was first approved.
But as Indiana officials investigated Spectacle, they uncovered more issues aside from the campaign contributions. Investigators found unreported stock transfers took place within the company, and even after Ratcliff voluntarily agreed to step down last year as Spectacle’s chairman and CEO, they learned he was still involved in daily operations of the Majestic Star Casino in Gary.
That led to the suspension of his license in December.
Ratcliff sued the commission in January, claiming he was not afforded due process before being suspended. In the complaint, his lawyers argued the December hearing where he was suspended in an emergency order served as an attempt to coerce him to sell his stake in the Gary casino to Hard Rock at a discount.
While his license was suspended, the state learned he failed to disclose $900,000 in racing deposits in win/loss statements on a 2018 gaming license application.
Eventually, the parties reached a settlement that led Ratcliff to drop his suit, sell his shares to Gibson and Hard Rock, and agree to not appeal the license suspension.
The commission also fined Spectacle $530,000 – or $10,000 a day – for each day it failed to reach an agreement on breaking away from Ratcliff. Tait said that was the first time a casino owner failed to comply with a commission order.
Investigation Impacted Casino Licenses
The investigation has had a profound impact on the two licenses that Spectacle held with the Majestic Star, which operated on two boats in Gary’s Buffington Harbor.
After selling Centaur, which owned the Indiana Grand and Hoosier Park racetrack casinos, Ratcliff, along with Terre Haute businessman Greg Gibson, formed Spectacle Entertainment to buy the Majestic Star.
In July 2019, it was announced that the land-based Gary casino would be operated by Hard Rock International in partnership with Spectacle
The state law authorizing the move to an inland casino in Gary freed up the second Majestic Star license, which was awarded to Terre Haute in west central Indiana. Voters in Vigo County approved a referendum in November 2019 to allow casino gaming there.
A month later, Spectacle and Hard Rock submitted the only application for Terre Haute.
In early January 2020, Spectacle and Hard Rock, along with local and state officials, broke ground on Hard Rock Northern Indiana, a $300 million casino in Gary. Roughly two weeks later, IGC officials announced the start of their investigation into Spectacle.
The investigation led to a three-month delay of the official award of the casino license for Terre Haute, and the IGC only approved that in May 2000 after Ratcliff and Keeler agreed to divest themselves from it. Gibson, now the lead for the Terre Haute project, named the venture Lucy Luck, with plans still to operate a Hard Rock casino an hour west of Indianapolis.
However, that $120 million project did not move forward over the next year, as gaming commission officials raised concerns with potential leadership candidates and a lack of details on financing. In June, the IGC took the drastic step of not renewing Lucy Luck’s license.
A new submission process has started for the Terre Haute license, with applications due on Sept. 22.
The investigation has also impacted Spectacle’s standing in Hard Rock Northern Indiana. On Wednesday, the IGC approved a plan making Hard Rock International the majority owner in the Gary casino and substantially reducing Spectacle’s involvement.
Even as the licensure situation has been resolved, Spectacle still remains under investigation, Deputy Director Jenny Reske told Casino.org this week.
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