Indiana authorities allow Caesars to keep Horseshoe Hammond casino
Posted: Jun 26, 2021, 8:26 a.m.
Last update on: June 26, 2021, 8:26 a.m.
Caesars Entertainment will be able to operate three casinos in Indiana thanks to a ruling released Thursday by the state’s gaming regulator.
The Indiana Gaming Commission voted 4 to 1 to accept a request from the Las Vegas-based company to remove Horseshoe Hammond from the market.
Last July, the IGC approved the $ 17.3 billion acquisition of Caesars by Eldorado Resorts, which later changed its name to the video game giant. At that time, Eldorado owned Tropicana Evansville. Caesars owned Horseshoe Hammond, Caesars Southern Indiana, Harrah’s Hoosier Park, and Indiana Grand.
However, the commission stipulated its approval with the requirement that the newly merged company sell three of its five casinos by the end of last year. At the time, these five casinos accounted for 61.1% of the adjusted gross revenue generated by the state’s 13 licensed casinos.
The new Caesars sold the Tropicana Evansville to Bally’s in October, then struck a deal with the Eastern Band of Cherokee Indians to sell the Caesars Southern Indiana in December. Last November, the IGC gave Caesars an extra year to find a buyer for Horseshoe.
The deal with Bally was officially closed earlier this month, and Caesars CEO Tom Reeg told IGC commissioners that the sale of Caesars Southern Indiana is expected to close within the next three months.
The mayor of Hammond said he was concerned about the sale
At Thursday’s IGC meeting, Caesars CEO Tom Reeg told commissioners he had done a “bad job” in answering their questions about their concerns about market concentration. Last July, he tried to get them to sign Caesars by selling just two properties.
However, since that time there have been new developments in the Chicago-North Indiana market. Some, like the opening of Hard Rock Northern Indiana in nearby Gary, were expected.
Reeg noted that others, like the approval of the Class III gaming compact for the Four Winds Tribal Casino in South Bend, were “not on the table” a year ago. The Pokagon Band of the Potawatomi Indians had expressed interest in a Class III permit, but an agreement on the pact was not reached until January and approved by lawmakers before April.
In addition, Reeg added that there remains significant uncertainty regarding the gaming market on the Illinois side. Chicago officials recently issued a request for information solicitation on its casino project. And a casino for the southern suburbs of Chicago, approved by Illinois lawmakers in 2019, remains in limbo.
Caesars also garnered support from Hammond Mayor Thomas McDermott Jr., who wrote to the IGC earlier this month and lobbied on behalf of Caesars. He said forcing the company’s hand to sell the state’s largest casino put the Northwest Indiana community at risk.
“I think the transfer of the Hammond license allows the investment of a casino company with less track record and less name than Horseshoe and Caesars,” the mayor wrote. The new management of Caesars “has proven itself to me and to our city since becoming the owner of the city’s largest private industry.”
Caesars Indiana’s market share drops
Based on the IGC’s financial report for May, adjusted gross revenues for Hammond ($ 38 million), Indiana Grand ($ 30.1 million), Hoosier Park ($ 21.2 million) totaled 89 , $ 3 million. With a total of $ 239.4 million statewide, not including Four Winds Casino revenue, these three sites had a 37.3% share.
That percentage, however, is likely to drop even more as those numbers included Hard Rock’s $ 21 million in revenue, and that casino was only open for 18 days. Eventually, a planned casino for Terre Haute, whose original licensee saw its license not renewed at Thursday’s meeting, could also cut it, Reeg said.
“We would expect that, given all of the competitive openings that we see in northern Indiana, (market share) would eventually settle in the thirties, which frankly is much more in line with what that you see in other jurisdictions and where Indiana has been in the past, “ Reeg told the commissioners.
However, Commissioner Marc Fine raised some issues regarding the lifting of the obligation to sell. He felt that a games company with a market share in the order of 30% was still too concentrated, and he expressed concern that allowing Caesars to have that much share market would lead to “more concentration than we would like” in the years to come.
He said the commissioners made the right choice last year.
I would love to see Caesars stay in Hammond. I think that would be great, ”said Fine, who voted the only no in the decision. “But we did not select the properties to sell. These were selected by the Césars. So if they really want to stay in Hammond, they should stay in Hammond. They have other licenses and other properties that they can consider.
However, Fine’s colleagues chose to approve the request, citing Hammond’s concerns as well as the COVID-19 pandemic and uncertainty over the Chicago-area gaming market.