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Hoosier lawmakers OK second $50 million fee in connection with Gary casino move
2019 Indiana General Assembly

Hoosier lawmakers OK second $50 million fee in connection with Gary casino move

INDIANAPOLIS — Spectacle Entertainment would be socked with another $50 million fee if the Majestic Star casino owner relocates to a land-based site in Gary and sells the new casino to another company within five years.

The Indiana House amended Senate Bill 552 Thursday by authorizing a first-of-its-kind "flipping fee" in connection with a quick casino sale.

State Rep. Matt Lehman, R-Berne, said he proposed the fee out of concern for Spectacle's long-term commitment to the new Gary casino, which likely would be adjacent to the Borman Expressway.

"If they choose to either transfer or sell that license in the first five years of their approved operations, then they would pay $50 million," Lehman said. "So that way it holds them in that position for at least five years."

Lehman's amendment was approved on an unrecorded voice vote and now is part of the massive gaming legislation that's set for final House action Monday.

John Keeler, Spectacle general counsel, said the company is not planning to promptly sell the $300 million, land-based Gary casino and 200-room hotel that will be built if Spectacle receives legislative and regulatory approval to replace its two Majestic Star casino boats on Lake Michigan.

Spectacle still objects, however, to the requirement in the proposal that it pay a separate $50 million fee, and surrender the second Gary gaming license, as a condition of relocating operations from Lake Michigan to a more accessible Borman site, Keeler said.

A second amendment, proposed by state Rep. Earl Harris Jr., D-East Chicago, and adopted by the House, requires Spectacle to offer continued employment to all Majestic Star workers at the time of the relocation, as well as to give hiring priority to any Ameristar Casino employees who lose their jobs as a result of the increased competition from an inland Gary casino.

On the other hand, the House rejected a Harris proposal to revive "hold-harmless" language, similar to a provision previously approved by the Senate, that would ensure Hammond and East Chicago maintain nearly all their current gaming tax revenue following the Majestic Star move.

It also defeated his recommendation that the state, instead of Northwest Indiana motorists, pay for 10 years all tolls on the privately operated Cline Avenue Bridge currently under construction in East Chicago.

Among the other amendments approved by the House was a requirement that any meeting between a casino owner, or a prospective casino owner, with the governor, his staff or any member of the Indiana Gaming Commission be conducted in public, with 48 hours advance notice.

That provision, submitted by state Rep. Pat Bauer, D-South Bend, comes of the heels of a report that Gov. Eric Holcomb traveled with Spectacle leaders on a private plane to a meeting of the Republican Governors Association shortly before Spectacle announced its plans to purchase the Majestic Star.

"This is simply trying to make sure that there isn't even a hint of a private meeting," Bauer said. "So this kind of suspicion won't fall upon the things we do."

The public notice mandate likely is unworkable given the regular and routine contact between operators in the state's heavily-regulated gaming industry and the people overseeing that industry at the gaming commission and in the executive branch.

Assuming the overall measure wins House approval Monday, it will go to a House-Senate conference committee to hammer out the differences between the versions of the legislation separately passed by each chamber.

A final, compromise proposal then must be re-approved by both the House and Senate to advance to the governor for his signature or veto.

Besides the potential Gary casino move, the legislation opens the door for a Terre Haute casino, adjusts tax rates for all Indiana casinos and legalizes in-casino sports wagering, among other provisions.


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