Indiana Hard Rock Casinos In Hot Water After Latest IGC Meeting

Today, both parent companies of the Indiana Hard Rock Casino failed to renew their gaming licenses.

The show at Hard Rock Northern Indiana is being run by Spectacle Entertainment. Meanwhile, Lucy Luck Gaming is managing Terre Haute’s “Rocksino.”

After today’s meeting with the Indiana Gaming Commission (IGC), the two are in trouble.

The construction of the Hard Rock Casino in Terre Haute is experiencing further delays due to licensing issues. Lucy Luck is unable to secure approval for the casino’s funding because of these license complications.

Construction on the Terre Haute property may not commence for a long time unless a license and funding are secured.

Lucy Luck had hoped to commence the construction of the Rocksino by the first week of July. However, that target date is no longer feasible.

Lucy Luck doesn’t renew her license.

Lucy Luck no longer has a license, which is required to operate a casino in Indiana.

The company obtained its gaming license in May 2020, but it requires annual renewal. The IGC will not sanction the funding for Hard Rock until Lucy Lucks secures this renewal.

Currently, the company lacks an executive management team. The IGC expresses their frustration with the slow progress, considering Lucy Luck has had more than a year to complete these crucial appointments.

Susan Williams, the Commissioner, was especially worried about the company’s insufficient experience in the gaming industry.

Essentially, this is a startup company and the goal is to leverage everyone’s talent. However, the inability to recruit an executive team raises questions about the industry’s overall confidence in this applicant. From my perspective, the confidence level for a startup that struggles to find executive team members is quite low.

If Lucy Luck had hired an experienced team to run the company, those concerns could have been eased. However, they have been inactive.

The company is reluctant to employ staff and keep them on the payroll for more than a year while the Terre Haute Hard Rock is still being built. This is what led to Lucy Luck losing its license.

The IGC believes it is crucial to have the entire team present when constructing a new casino.

If Lucy Luck were a well-established gambling company, this issue wouldn’t exist. However, due to Lucy Luck’s lack of prior experience in the gaming industry, the commission is reluctant to give it the benefit of the doubt.

Lucy Luck has 90 days to make things right.

The IGC’s frustration over Lucy Luck’s lack of progress was clearly visible; there was no hiding it.

Admittedly, the pandemic caused several delays for Hard Rock in Terre Haute.

Regardless, the commission has reached its limit. In their view, it is unacceptable to not have a management team in place a year and a half into the process.

The IGC believes they provided Lucy Luck with ample opportunities, so they are now restarting the process from the beginning.

The commission has opened up applications for companies interested in running the Rocksino. The deadline for applications is Sept. 22. Lucy Luck has the option to reapply for the license, however, the IGC will only consider their application if they resolve their existing issues beforehand.

Sara Tait, the Executive Director of IGC, stated that the commission will persist in maintaining a high standard for gaming companies in Indiana.

“We desire for Terre Haute to possess the finest project achievable, yet it is crucial for the community to trust that the commission will only green-light a plan with the highest likelihood of success.”

Back in 2019, Lucy Luck was the sole company to apply for the casino license originally.

However, this new application session creates an opportunity for a new investment group to step in and take control of the project.

Minority owners of Indiana Hard Rock stir up trouble

What’s happening with the other Hard Rock in Indiana?

The issues with Spectacle Entertainment’s license are due to minority owners who are unwilling to abide by the rules of the IGC.

In reaction to an ongoing Spectacle scandal, the IGC introduced a new regulation requiring Indiana casino owners to apply for a Level I gaming license. This process necessitates the disclosure of in-depth financial background information.

Some minority owners of Spectacle detest the new rule and attempted to sue the gaming commission to evade complying with it.

Earlier this week, the court decided in favor of the IGC, hence the owners are now obliged to cooperate or sell their company shares.

Originally, Spectacle was given until June 21 by the commission to ensure compliance from those minority owners. However, the deadline has now been extended to July 23.

Lucy Luck owners won't comply either

Lucy Luck is in a situation similar to that of Spectacle.

Currently, Lucy Luck has 21 minority owners who refuse to adhere to the rules. However, they represent only about 2.9% of the company’s voting units. Hence, the IGC is more concerned about the casino’s management team at present.

On the other hand, Spectacle has six minority owners who are not adhering to the new rule. However, these six owners represent more than 11% of the company. This is why the IGC views it as a significant issue for the property in Northern Indiana.

The gaming commission will not renew their licenses until both casinos resolve this situation.

Greg Gibson, the majority owner of Spectacle and Lucy Luck, has been making efforts to stabilize the Indiana Hard Rock properties.

Gibson has been proposing buyouts to minority owners in an attempt to stimulate progress. While many owners have embraced his proposals, there remain a few resistors.

Now that the court has ruled in favor of the IGC, he’s adopting a more aggressive strategy. Minority owners must comply or sell their shares by July 14. Should they fail to meet this deadline, the companies will automatically repurchase their shares.

The timeline will provide Gibson with an opportunity to arrange the paperwork prior to the July 23 deadline set by the IGC.

The gaming commission aims to conclusively resolve all pending matters. Although the next meeting of the IGC was initially set for September, it is expected to be rescheduled to late July to accommodate the new deadlines.