Both of the Indiana Hard Rock Casino parent companies failed to renew their gaming licenses today.
Spectacle Entertainment is running the show at Hard Rock Northern Indiana. Lucy Luck Gaming is in control at Terre Haute’s “Rocksino.”
The two are in trouble after today’s Indiana Gaming Commission (IGC) meeting.
Construction on Terre Haute’s Hard Rock Casino is facing another delay because of its licensing issue. Lucy Luck can’t get the casino’s funding approved thanks to its license problem.
Without a license and funding in hand, it could be a long time before construction finally starts on the Terre Haute property.
Lucy Luck was hoping to break ground on the Rocksino by the first week of July. That target date is no longer on the table.
Lucy Luck fails to renew license
You can’t operate a casino in Indiana without a license, and Lucy Luck doesn’t have one anymore.
The company secured its gaming license back in May 2020, but it needs to be renewed every year. The IGC won’t approve the Hard Rock’s funding until Lucy Lucks snags that renewal.
As of right now, the company does not have an executive management team in place. The IGC is frustrated by the slow progress since Lucy Luck has had over a year to make those important hires.
Commissioner Susan Williams was particularly concerned about the company’s lack of gaming industry experience.
“This is basically a startup company and you want to bring your talent to the table, bring everybody to the table. The fact that there’s an inability to hire an executive team makes me wonder if the industry in general does not have confidence in this applicant. The confidence level from my point of view, of a startup company that can’t hire an executive team, is very low.”
Hiring an experienced team to run the company could have eased those concerns, but Lucy Luck has been sitting on its hands.
The company doesn’t want to hire employees and have them on payroll for over a year while the Terre Haute Hard Rock is still under construction. That ended up costing Lucy Luck its license.
The IGC thinks that having the full team in place is important when building a new casino.
If Lucy Luck was an established gambling company, this wouldn’t be a problem. Since Lucy Luck doesn’t have any previous gaming industry experience, the commission won’t be giving it the benefit of the doubt.
90 days for Lucy Luck to fix things
There was no hiding the IGC’s frustration over Lucy Luck’s lack of progress.
Granted, the pandemic did create a number of delays for Terre Haute’s Hard Rock.
Despite that, the commission has had enough. Not having a management team in place over a year and a half into the process is not good enough in its eyes.
The IGC feels like it gave Lucy Luck plenty of opportunities, so now they’re starting the process over from scratch.
The commission is taking new applicants to run the Rocksino. Companies have until Sept. 22 to apply. Lucy Luck can reapply for the license, but the IGC won’t grant it to the company unless it fixes its issues first.
IGC Executive Director Sara Tait said that the commission will continue to hold gaming companies to a high standard in Indiana.
“We want Terre Haute to have the very best project possible, but the community needs to have confidence that the commission will only approve a plan that has the greatest prospects of success.”
Originally, Lucy Luck was the only company that applied for the casino license back in 2019.
However, this new application session opens the door for a new investment group to swoop in and take over the project.
Indiana Hard Rock minority owners cause trouble
So what’s going on with the other Indiana Hard Rock?
Spectacle Entertainment’s license woes come down to minority owners that refuse to comply with the IGC’s rules.
In response to a Spectacle scandal that has been going on for months, the IGC created a new rule that forces casino owners to apply for a Level I gaming license in Indiana. That involves disclosing detailed financial background information.
Some of Spectacle’s minority owners hate the new rule, and tried to sue the gaming commission to avoid following it.
The court ruled in favor of the IGC earlier this week, so those owners will have to either play ball or sell their shares in the company.
The commission originally gave Spectacle until June 21 to make those minority owners comply. It’s extending that deadline to July 23.
Lucy Luck owners won’t comply either
Lucy Luck is in a similar situation to Spectacle.
Right now, Lucy Luck still has 21 minority owners that won’t follow the rules. That only accounts for about 2.9% of the company’s voting units, so the IGC is more worried about the casino’s management team for now.
Spectacle, on the other hand, has six minority owners that aren’t following the new rule, but those six owners account for over 11% of the company. That’s why the IGC sees it as a bigger problem for the Northern Indiana property.
Both casinos have to sort out this situation before the gaming commission will renew their licenses.
Greg Gibson is the majority owner of both Spectacle and Lucy Luck, and he’s been trying to right the ship for the Indiana Hard Rock properties.
Gibson has been offering buyouts to the minority owners to try and get things going. Many of the owners have accepted his offers, but there are still some holdouts.
He’s taking a more aggressive approach now that the court ruled in the IGC’s favor. Either comply or sell your shares by July 14. If the minority owners miss that date, then their shares will be automatically repurchased by the companies.
That timeline will give Gibson a chance to get the paperwork in order before the IGC’s July 23 deadline.
The gaming commission wants to finally put all of this behind them. The IGC’s next meeting was originally scheduled for September, but will likely be moved to late July to account for these new deadlines.