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Judge dismisses lawsuit challenging Indiana casino owner integrity rules

Judge dismisses lawsuit challenging Indiana casino owner integrity rules

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Pictured is the exterior of The Hard Rock Casino Northern Indiana.

A lawsuit that once imperiled operations at Northwest Indiana's newest casino by challenging the validity of state integrity rules for shareholders in privately owned gaming companies has been dismissed.

Marion Superior Judge John Chavis II last week granted a request by former Spectacle Entertainment shareholders to immediately dispose of their lawsuit against the Indiana Gaming Commission (IGC).

The dismissal comes on the heels of the IGC approving a plan for Spectacle to sell majority control of the Hard Rock Casino Northern Indiana to its operating partner, Hard Rock International, and for Spectacle's primary owner, Greg Gibson, to use the proceeds to buy out the minority Spectacle shareholders.

The Hard Rock Northwest Indiana officially opened its doors to the public with the breaking of guitars on Friday

The IGC also authorized a one-year renewal of the Hard Rock Casino gaming license at its Aug. 18 meeting after previously granting only interim license renewals while the Spectacle shareholder lawsuit was pending.

An Indiana casino cannot operate without a valid IGC license.

The Spectacle shareholders included entities linked to several prominent Hoosier Republicans, among them Dan Dumezich, a former Schererville state representative and past treasurer of the Indiana Republican Party; Stephen Hilbert, an insurance company executive and onetime business partner of former President Donald Trump; Matthew Whetstone, a Statehouse lobbyist and former member of the Indiana House; and Dan Hasler, a former Indiana secretary of commerce under Gov. Mitch Daniels.

They claimed the IGC exceeded its authority by requiring investors in privately owned casino companies be subject to the detailed financial and background investigations necessary to acquire a Level 1 occupational license, as well as refraining from legislative lobbying, gambling at the Hard Rock Casino, doing independent business with casino vendors, and notifying the IGC when they have more than $50,000 cash on hand.

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Chavis previously ruled the IGC was well within its rights under state law to enact the requirements, particularly given the alleged misdeeds of several former Spectacle executives who worked together at Centaur Gaming prior to acquiring the Gary casino license.

"The IGC investigated these activities revealing undisclosed financial transactions, hidden ownership transfers, improper use of funds, improper accounting practices, ex parte communication with certain former commissioners, and other matters," Chavis said.

"From these events, IGC believed there were gaps in its existing rules regarding attempts to separate persons deemed unsuitable from the casino owner's licensee. IGC drafted the emergency rule to close this gap."

The Hard Rock Casino opened to the public May 14. It was Indiana's second-highest grossing casino in August, records show.


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