Investor dispute may jeopardize Hard Rock Casino license renewal | National news

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The parent company of Hard Rock Casino Northern Indiana is working to ensure that all shareholders abide by the state’s new rules for investor integrity before the Indiana Gaming Commission meets next week to consider extending its casino license.

Spectacle Entertainment CEO Jahnae Erpenbach sent a letter to the Gary Casino investors on Wednesday asking if they intend to provide the extensive financial and background information required under the emergency settlement agreed by the Intergovernmental Conference on March 23rd.

Erpenbach said in the letter that any Spectacle direct or indirect investors who do not apply for an IGC Level 1 professional license by June 21 will automatically buy back their shares from the company, as usually provided, either at the current market price or at the original Purchase price, whichever is lower.

“Due to the upcoming (casino) license extension, time is of the essence here,” said Erpenbach.

A casino cannot operate in Indiana without a valid license.

It is not known how many of the seven Spectacle shareholders who challenged the IGC rule in an Indianapolis court responded to Erpenbach’s request that the company immediately notify the company whether they intend to comply with the licensing mandate for private casino investors.

But at least one shareholder, Windy City H&C Investors LLC, filed the letter with a Marion County judge to back up his claim that Spectacle and the IGC are trying to “oust minority investors from Indiana Gaming.”

“As Windy City has claimed since the beginning of this proceeding, (Spectacle) is using the Emergency Rule inappropriately and aggressively to displace Windy City at a fire sale price. This letter is further confirmation that Windy City will lose the value of its investment and be out of the game in Indiana unless the court orders the emergency rule, “said Paul Edgar Harold, attorney for Windy City.

According to court records, Windy City is run by Dave Shepherd, an insurance agent from Carmel, Indiana, and Indiana Mr. Basketball in 1970.

Records show that Shepherd spent $ 2.5 million buying about 4% of Spectacle in 2018. He refuses to send his financial and background information to the Intergovernmental Conference as he said it would take 80-100 hours to fill out the forms and he considers it unnecessary because he did not have any direct involvement in the game operations at Hard Rock.

At the same time, Shepherd said he believes the $ 6 million Spectacle is offering to buy back its shares is a “low” offer as he expects the value of his Spectacle investment to increase significantly since the Hard Rock Casino opened on May 14th has risen.

Several other Spectacle investors have made similar claims in Marion County’s lawsuit to stop IGC rule enforcement, including two companies, Laelaps LLC and MD Twenty-Twenty LLC, which state records show are on Dan Dumezich, a retired attorney, is registered state officials and judge in Schererville Municipal Court and former Treasurer of the Indiana Republican Party.

Marion Superior Judge John Chavis heard oral arguments in the case on May 14th, initially saying he planned to rule on June 4th.

However, Chavis recently agreed to allow additional documents to be filed with the court, likely delaying his decision until after the June 24th IGC session where the Hard Rock Casino license renewal is on the agenda.

The IGC has asked Chavis to dismiss the investor lawsuit claiming the integrity rule only places obligations on Spectacle, the holder of the Gary casino owner’s license, and not on Spectacle’s individual investors.

“Plaintiffs are not eligible to bring claims in this lawsuit because they have no demonstrable infringement,” said the IGC.

Without the rule, however, IGC claims that public confidence in the state’s gambling industry could be seriously damaged – and it already has – due to unsavory individuals investing in private casino companies.

“As of early 2020, Indiana’s gambling industry has been the subject of widespread derogatory information about companies owned by these plaintiffs. The information includes federal charges against a licensed casino owner and officer in Indiana for references to another licensed casino owner and officer in court documents, hidden transfers of casino property from the commission, and undisclosed links with lobbyists, “the Intergovernmental Conference said .

“These events cast a shadow over the industry and helped undermine its reputation and integrity. The refusal to provide licensing information creates a blind spot in the Commission’s ability to determine the nature of casino transactions, casino owner associations and overall fitness to hold interests. “

Hard Rock Casino in Gary and the upcoming Terre Haute Casino, whose license is also due to be renewed next week, are the only two casinos in the state that are subject to the Investor Integrity Rule as they are not owned by publicly traded companies.



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