Hard Rock Casino Northern Indiana May Have License Issue
The Hard Rock Casino Northern Indiana is up for license renewal and an investor issue may prove to be a fatal blow in maintaining gaming access.
Spectacle Entertainment is the gaming company behind the Hard Rock Casino Northern Indiana. The venue is currently having to work hard to ensure that shareholders are compliance with new investor integrity rules set forth by the state. The company will appear before the Indiana Gaming Commission next week to have its license under review for renewal. Now it seems that an investor issue may play a role in keeping the venue from obtaining the appropriate approvals.
What’s Going On?
Last week, CEO of Spectacle, Jahnae Erpenbach sent a letter to the casino investors to ask if they would be sending in financial and background information that is required based on the emergency rule taken on by the Commission in late March.
In the letter, the CEO said that any investor that does not apply for IGC Level 1 occupational license by the 21st of June will have their shares bought back by the company. The purchase price will either be current market price or the original purchase price, based on the lowest amount.
Erpenbach pointed out that time is of the essence when it comes to the license renewal process. The Gary casino would be ineligible to operate in Indiana without the license in place. It is unclear as to how many of the seven shareholders have turned in the data or are not complying with the request.
Backlash from Shareholders?
According to media reports, at least one shareholder in the casino feels that the Commission and Spectacle Entertainment are trying to squeeze minority investors out of the industry. Windy City H&C Investors LLC sent a letter to a judge in Marion County making this statement.
The company says Spectacle is using the emergency rule to squeeze the company out at a fire-sale price. According to Windy City, they will lose the value of its investment and be pushed out if the court does not decide to enjoin the emergency rule.
Court records show that Dave Shepherd is in charge of Windy City and he spent $2.5 million to purchase 4% of the Spectacle company back in 2018. He does not want to submit the information requested by the Commission because it will take up to 100 hours to complete the forms. Shepherd feels that the process is unnecessary as he has no direct involvement with gaming operations at the casino.
Shepherd was offered $6 million to buy his shares back and feels that Spectacle is lowballing him. He expects the value to increase since the Hard Rock Casino just opened back in May.
Apparently, other investors of Spectacle have felt the same about the company and feel that the Gaming Commission rule needs to be stopped. Oral arguments were actually heard in a case in mid-May and a ruling was supposed to be made by Judge John Chavis in early June.
However, the judge allowed more documents to be filed in the court, and the ruling has now been delayed. This will cause the ruling to take place after the upcoming meeting within the Commission. The Gaming Commission has requested that the investor lawsuit be dismissed because the integrity rule is based on Spectacle and now the individual investors.
The gaming industry has been subject to controversy as of late due to information involving entities of which certain individual have ownership in. Licensed casino owners reputations have come under scrutiny in the past due to undisclosed ties to lobbyists. And with the individuals connected to Spectacle now not wanting to provide this information it begs the question as to if there might be issues at play.
We shall see how this plays out and if the Commission is willing to allow the license to continue or if the casino will lose out due to shareholders issues providing the requested information.