Eastern Band of Cherokee Indians in Exclusive Window to Purchase Caesars Southern Indiana
Posted on: November 22, 2020, 09:43h.
Last updated on: November 23, 2020, 11:47h.
Caesars Southern Indiana casino may soon find itself under new ownership. Earlier this month, the Eastern Band of Cherokee Indians signed a letter of intent with Caesars Entertainment Inc. that gives the tribal nation an exclusive 45-day window to negotiate a purchase of the property.
At a Nov. 12 meeting, the EBCI Tribal Council agreed to set aside funding for outside legal counsel and due diligence measures, such as having an external firm audit the casino’s books and have an engineering firm inspect the property.
Principal Chief Richard Sneed told council members this is a new process for the tribal nation because it is used to dealing with new construction on land it already owns.
“If any other firm were purchasing this casino, and there’s a line of firms waiting if we don’t, they would go through this same process,” he said.
The council approved the expenditure by an 8-3 vote with one abstention.
Caesars must sell three of its five casinos in the state, as stipulated by the Indiana Gaming Commission’s approval of the Eldorado Resorts acquisition of the iconic gaming brand back in July. At that time, the IGC gave the company until the end of the year to have agreements in place.
Facing New Competition, EBCI Seeks Revenue Streams
Sneed added that purchasing the casino resort would help generate revenue for several necessities within the tribal community. That includes health care. He noted that while tribal members do not pay out-of-pocket for medical needs, the funding EBCI gets from Indian Health Services does not cover all expenses at the nation’s hospital. He added the tribe had to provide $16 million in funding for the facility last year.
What we’re purchasing is cashflow,” Sneed said. “We’re purchasing a business with a known amount of cashflow and a known return to the tribe.”
Caesars and EBCI already have a working relationship. Caesars operates the tribe’s two North Carolina casinos in Cherokee and Murphy under the Harrah’s brand.
So, why does the Eastern Cherokee need a new revenue source? For more than two decades, their casinos in western North Carolina were the only gaming option in the region. However, that dominance will soon be put to an end.
Just across the Smoky Mountains, Tennessee officially launched sports betting at the beginning of the month. North Carolina has approved sports betting as well, but state officials have yet to implement it.
A couple of days later, voters in Bristol, Va., approved a referendum to allow a casino in their city. Bristol is just 100 miles away from the Harrah’s resort. The tribe tried unsuccessfully to develop a casino in the town on the Virginia-Tennessee state line. However, the city chose to back a plan to develop a Hard Rock casino resort.
The EBCI also faces competition in North Carolina. In July, the Catawba Indian Nation broke ground on a $300 million resort in Kings Mountain, roughly 35 miles from Charlotte. Cherokee leaders filed suit against the project earlier this year. The Cherokee claims historical ties to the land on which Catawba is building its casino.
Caesars Among Indiana’s Biggest Casinos
According to IGC monthly revenue totals, Caesars Southern Indiana is one of the state’s highest-producing casinos.
Through October, Caesars has generated $14.4 million in tax revenue for the state since July. That ranks fifth among the state’s 12 casinos, and tops among the six southern Indiana properties.
In addition, Caesars Southern Indiana is producing that level of revenue with just 661 slot machines and 80 table games available because of COVID-19. Harrah’s Hoosier Park in Anderson has generated $14.7 million, with 849 slots and 28 table games. In East Chicago, the Ameristar Casino has generated $18.9 million, with 1,028 slots and 67 tables.
When COVID-19 restrictions are lifted, Caesars is approved to hold more than 1,200 slot machines and 103 table games. That’s more table games than any other southern Indiana casino, and second behind Hollywood Lawrenceburg for slots.
Last December, Caesars moved the casino from a docked riverboat to a $90 million land-based facility. Besides the casino, Caesars Southern Indiana also includes a 503-room hotel, an events center, a steakhouse, and a nearby golf course.
One Agreement Already in Place
Caesars already has an agreement in place to sell one of three casinos in Indiana.
Last month, the company announced a deal with Twin River Worldwide Holdings (now Bally’s Inc.) and Gaming and Leisure Properties for Tropicana Evansville. Bally’s bought the casino operations for $140 million, and GLPI purchased the real estate for $340 million. GLPI will then lease the property to Bally’s for $28 million.
Officials from the companies expect the deal to close by mid-2021. It also requires the IGC approval.
The other property Caesars plans to sell is Horseshoe Hammond, near Chicago. Caesars officials have expressed concern about being able to sell that property quickly, and may be able to get an extension from the commission in order to find a suitable buyer.
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