Las Vegas-based casino giant Caesars Entertainment is ready to pull the plug on a US$90m casino project in Indiana if the Indiana Gaming Commission doesn’t drop a $50m transfer fee added to Caesar’s purchase of Centaur Gaming and its two casinos.
The project in question involves Caesars building a land-based casino on its Horseshoe property in Southern Indiana. Centaur Gaming and its Hoosier Park casino and racetrack in Anderson and Indiana Grand casino and racetrack in Shelbyville were snapped up by Caesars, who already owns two casinos in Indiana, for $1.7bn in November.
State legislation dictates that when a casino licence is sold on, the original license holder must pay a $50m transfer fee. The issue has been complicated by Centaur’s Chapter 11 bankruptcy eight years ago when the licence was transferred from Centaur’s subsidiary Hoosier Park LP to Hoosier Park LLC.
Caesars claims that the fee should not now be applied because its purchase does not involve the casino’s initial license holders.
Indiana Gaming Commission Deputy Director Jennifer Reske said: “The commission staff has reviewed the document submitted by Caesars, and we respectfully disagree with their conclusion. Commission staff has conducted a thorough review of the applicability of the fee, and it is staff’s position that the fee does apply to the transfer of Hoosier Park, and staff requires the fee to be paid by Centaur.”
Timothy Donovan, Executive Vice President for Caesars, said: “Caesars is now facing some very difficult decisions with regard to its proposed $90m investment in southern Indiana. We would prefer not pulling it from next week’s agenda, but at this point we may have no choice given the continued uncertainty surrounding the $50m transfer fee.”
Ms Reske added: “We’re very disappointed Caesars has decided to make the project in southern Indiana contingent upon a favourable opinion of the $50m fee.”