Indiana Casino Licenses At Risk After Casino Exec Indicted On Finance Violations

John Keeler, a casino executive, and Brent Waltz, a former state senator, have been indicted for violations of campaign finance laws.

A federal indictment revealed on Sept. 29 charges Keeler with conspiring to channel money into Waltz’s congressional campaign.

In 2016, Waltz unsuccessfully ran for election in Indiana’s 9th Congressional District.

Currently, the Indiana Gaming Commission (IGC) is closely examining Spectacle Entertainment’s casino license.

Keeler is an employee of Spectacle Entertainment, the company that runs the two Majestic Star Casinos in Gary, Indiana.

The company is also presently constructing a new Hard Rock Casino that will be replacing the Majestic Stars in Gary within a few months.

Spectacle Entertainment investigation

This all began with a court case in Virginia.

In January, Charles O’Neil admitted to illegally contributing to Waltz’s campaign by channeling money from Centaur Gaming. He pleaded guilty to these charges.

Things get complicated at Centaur Gaming.

Some of the officials who were involved with Centaur at the time now hold executive positions at Spectacle Entertainment, and Keeler is one of these executives.

Spectacle Jack, a subsidiary of Spectacle Entertainment, was competing for a new license to construct a standalone Hard Rock Casino in Terre Haute.

The situation involving O’Neil initiated an investigation into the company and also diminished the likelihood of Spectacle Jack receiving a license from the IGC.

In an effort to extricate itself from the situation, Spectacle Entertainment sold Spectacle Jack to Greg Gibson, a businessman from Terre Haute.

Spectacle Jack received approval to construct Terre Haute’s Hard Rock Casino in May, following the departure of Spectacle Entertainment from the project.

So, even though Spectacle Entertainment may have distanced itself from the Terre Haute situation, the company was still being investigated by the IGC for alleged illegal campaign contributions by O’Neil.

Given that Spectacle Entertainment is still running Majestic Stars and constructing the Hard Rock in Gary, the gaming commission couldn’t completely absolve the company.

However, the IGC’s capabilities are limited. It simply lacks the resources to probe violations of federal law of this nature.

The commission has been depending on the discoveries made by the federal government through their investigations.

While the federal authorities were working, significant progress was lacking in the Spectacle Entertainment investigation.

Nonetheless, with the recent indictment of Keeler on Tuesday, events are once again progressing.

The indictment of Keeler exacerbates issues for Spectacle.

Incorporating Keeler makes things more complex.

Keeler’s license was immediately suspended by the IGC, and currently, Spectacle’s license is also at risk.

The IGC’s executive director, Sara Gonso Tait, informed the Indianapolis Star that the situation is now in uncharted waters.

To claim that the charges detailed in the legal documents are disheartening would be a massive understatement. The indictment of Mr. Keeler and the individual suitability issues being investigated by our agency have resulted in an unparalleled series of adverse situations.

It is alleged that Keeler sent more than $40,000 to Waltz’s campaign.

The indictment alleges that Keeler utilized the services of political consultant Kelley Rogers to transfer the money. Last year, Rogers admitted guilt to charges of wire fraud.

The information was made public following the FBI’s raid on Waltz’s Greenwood home on Monday.

Things could now become chaotic.

Since Gary’s Hard Rock casino is nearly prepared for launch, it will require someone to manage operations.

Should the IGC revoke Spectacle’s license, a brand new casino in Gary will be left without anyone to manage it.

The Hard Rock won’t open until early 2021, providing a few months to resolve the situation.

Majestic Star Casinos

Even if the investigation concludes before the opening of the Hard Rock, the Majestic Star Casinos would still be in a challenging position.

For instance, should the IGC revoke Spectacle’s license next week, the Majestic Stars would be forced to cease operations.

Even a temporary roadblock like that would be far from perfect.

Due to the pandemic, the casinos were already forced to close earlier this spring.

The Majestic Star casinos, two in number, garnered over $9 million in adjusted gross revenue collectively in August. If Spectacle’s license were to be revoked, it would hinder this cash flow.

The IGC might exclude Spectacle from Indiana’s gaming scene, but it’s impossible to predict the outcome with certainty. We are on standby for the IGC’s subsequent action.