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State punishes former Gary casino executives, potentially delaying Hard Rock opening
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State punishes former Gary casino executives, potentially delaying Hard Rock opening

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GARY — The opening of the Hard Rock Casino Northern Indiana, scheduled for spring 2021, was thrown into uncertainty Wednesday after the Indiana Gaming Commission forced out two of the owners of the casino's parent company, Spectacle Entertainment.

In conjunction with imposing sanctions on former Spectacle CEO Rod Ratcliff and former Spectacle Vice President John Keeler, the commission endorsed the temporary halt of the transfer of gaming equipment and supplies to the new Gary casino that was supposed to begin next month from Spectacle's Majestic Star casinos.

Construction of the Hard Rock Casino, located adjacent to the Borman Expressway at Burr Street, is expected to continue without interruption.

But the commission's interest in keeping Majestic Star operational, generating tax revenue for the state and the community, and its hundreds of workers on the job necessitated pausing equipment transfers to the new casino until the Spectacle issues are more definitively resolved, said IGC Executive Director Sara Tait.

"Frankly, I feel more uncertain right now than I did coming into this meeting," Tait said.

The Spectacle issues center on alleged federal campaign finance violations for which Keeler, a former Indianapolis state representative, was indicted in September alongside former state Sen. Brent Waltz, R-Greenwood.

Ratcliff has not been charged with any crimes, but he was identified by the Gaming Commission as the casino executive who put in motion the alleged straw donor scheme to funnel casino money to Waltz's unsuccessful 2016 Republican primary campaign in Indiana's 9th congressional district.

At that time, Ratcliff and Keeler were top executives at Centaur Gaming, which owned the two central Indiana horse track casinos.

The racinos were sold for $1.7 billion in July 2018 to Caesars Entertainment Corp. Ratcliff, Keeler and other investors then formed Spectacle Entertainment to purchase Gary's Majestic Star casinos in March 2019.

After winning state legislative approval, Spectacle broke ground in January for the $300 million Hard Rock Casino Northern Indiana that will be the first land-based casino in Northwest Indiana, ultimately replacing the two Majestic Star gaming boats on Lake Michigan.

Commission sanctions

The actions taken by the Gaming Commission all but ensure Ratcliff and Keeler no longer will be affiliated with Spectacle when the new Gary casino opens.

Specifically, the commission unanimously agreed to impose a 90-day emergency suspension of Ratcliff's occupational license, barring Ratcliff from exerting any control or influence at Spectacle.

Keeler's license already was suspended by the commission Sept. 29.

According to the commission's order, Ratcliff's misdeeds go beyond the alleged campaign finance violations and include failing to cooperate with the commission's investigation, associating with others impeding the commission's investigation, and acting outside licensing conditions.

In addition, the commission said Ratcliff improperly transferred part of his Spectacle ownership to Keeler, former state Rep. Matt Whetstone, R-Brownsburg, and Spectacle Vice President of Development Rich Ziegler; acquired additional Spectacle ownership units without notifying the commission; and changed the terms of a trust agreement without commission notice.

The suspension of Ratcliff's gaming license also triggered a commitment Ratcliff made July 6 to the Gaming Commission where his ownership interest in Spectacle will be indefinitely administered by a trustee independent of Spectacle and deemed acceptable by the commission.

Attorneys for Ratcliff made a last-ditch appeal to avoid the loss of his occupational license and ownership authority. But the commission declined to consider the proposal to have Spectacle co-owner Greg Gibson buy out Ratcliff using funds borrowed from Ratcliff.

The commission also ordered Keeler to fully disassociate himself from his Spectacle ownership interests by Jan. 15, subject to commission approval of the purchaser.

Hard Rock committed

Prior to adopting the licensing and divestment orders, the commission considered turning over control of the Majestic Star to a previously designated trustee-in-waiting to operate the Gary casinos in the best interests of the state, city and casino employees.

However, the potential that move could trigger a default in the financing for the Hard Rock Casino spurred the commission to go in another direction.

Jon Lucas, chief operating officer of Hard Rock International, which is part-owner of the new Gary casino and under contract with Spectacle to operate it, said his company has made cash offers to acquire Ratcliff's stake and solve the underlying problem — to no avail.

Nevertheless, Lucas said Hard Rock still wants to be a long-term participant in Indiana's gaming industry, and hopes to avoid any further impediments that could delay the opening of the new Gary casino for which it already has begun hiring.

"Hard Rock International remains committed to the successful completion of the Hard Rock Northern Indiana project," Lucas said.

"We will work with the Indiana Gaming Commission and our partners at Spectacle Entertainment to bring resolution to the outstanding issues as identified in today’s Indiana Gaming Commission business meeting."

The current Spectacle leadership likewise pledged to continue fully cooperating with the Gaming Commission.

"We believe it is in the best interest of all parties involved, including the state of Indiana, our employees, community, and Hard Rock partners that a timely resolution of the matters discussed at the commission meeting today be reached," said Spectacle spokeswoman Kay Kearney.

"We are optimistic the Hard Rock Northern Indiana project will proceed as planned with minimal delay."

Spectacle Jack, a company formerly affiliated with Spectacle Entertainment, separately is working with Hard Rock to develop a smaller "Rocksino" casino in Terre Haute, using a state casino license previously assigned to Gary.

Indiana Gaming Commission order suspending Rod Ratcliff occupational license

Indiana Gaming Commission order on Rod Ratcliff casino ownership

Indiana Gaming Commission order on John Keeler casino ownership

Gallery: Gary's Hard Rock Casino groundbreaking

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