Global casino developer Caesars Entertainment Corporation is considering abandoning a multi-million dollar development in the US state of Indiana over a $50m transfer fee, if reports in the Indiana Business Journal are to be believed.
The operator agreed a $1.7bn deal to acquire the Hoosier Park Racing and Casino in Anderson and the Indiana Grand (Grand Racing and Casino) in Shelbyville late last year from Centaur Gaming LLC.
Its acquisition requires the review and approval of both the Indiana Gaming Commission and the Indiana Horse Racing Commission before it can be fully approved, with the review and approval process taking place later this year.
Indiana state gaming laws currently require the initial casino licence holder to pay a $50m transfer fee upon transfer of a controlling interest in the licensed property to another business.
One prominent exception to this is when the initial licence holder files for bankruptcy, which has occurred on two previous occasions on these properties. In both cases, the selling business filed for bankruptcy and the $50m fee was not paid as a result.
Both Caesars and Centaur Gaming LLC have argued that since the transaction between the two businesses does not involve the initial licence holders the $50m transfer fee should not apply, an argument which the Indiana Gaming Commission disputes.
Indiana Gaming Commission Deputy Director Jennifer Reske told the Indiana Business Journal: “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.”
This dispute puts the future of a $90m project to move one of its other properties, the Horseshoe Southern Indiana riverboat Casino, also in Indiana onto land in doubt. Caesars project to renovate and relocate the casino had been due to be passed to the Indiana Gaming Commission for review last week, but was pulled from the schedule at the last minute following the deadlock over the transfer fee.
Reske added: “We’re very disappointed Caesars has decided to make the project in southern Indiana contingent upon a favourable opinion of the $50 million fee.”
No further comment has been made by Caesars on the issue, however Centaur have issued a letter to the IGC stating that it “reserves all of its rights and intends to take all appropriate action, including but not limited to litigation, to resist imposition of the fee".
.jpg)
