An Indianapolis judge ruled Monday the Indiana Gaming Commission has the authority to require shareholders in the parent company of the Hard Rock Casino Northern Indiana to disclose extensive information about their personal backgrounds and finances to protect the integrity of gaming in the Hoosier State.
In a 17-page order, Marion Superior Judge John Chavis II rejected a request by several politically connected investors in Spectacle Entertainment's Gary casino to halt the enforcement of an IGC rule requiring them to submit data and records the IGC believes are needed for effective oversight of investors in privately held casino companies.
Chavis said Indiana law specifically requires the IGC to consider "the character, reputation, experience, and financial integrity" of any person who "directly or indirectly controls" a casino owner's license.
Under that broad grant of authority, Chavis said the IGC is well within its rights to demand Spectacle investors submit an application for a level 1 occupational license, particularly given the alleged misdeeds of several former Spectacle executives who worked together at Centaur Gaming prior to acquiring the Gary casino license.
"The IGC investigated these activities revealing undisclosed financial transactions, hidden ownership transfers, improper use of funds, improper accounting practices, ex parte communication with certain former commissioners, and other matters," Chavis said.
"From these events, IGC believed there were gaps in its existing rules regarding attempts to separate persons deemed unsuitable from the casino owner's licensee. IGC drafted the emergency rule to close this gap."
The plaintiffs claimed in court filings the disclosures required by the IGC are too extensive, the rule was not properly approved, a conspiracy is afoot to deny them licenses even if they submit the paperwork, and the IGC is working in cahoots with primary Spectacle owner Greg Gibson to deprive them of their increasingly valuable shares following the May 14 opening of the Hard Rock Casino.
Chavis found no issues with how the IGC adopted its emergency integrity rule. He also said there's no basis for the plaintiffs to pursue a judicial remedy at this time because they haven't even submitted their applications to the IGC, let alone suffered any harm as a result.
"To comply with the rule at this point, plaintiffs need only complete a written application for a license," said Chavis, who also extended until July 14 the deadline to submit the information demanded by the IGC.
The plaintiffs in the case include Dan Dumezich, a former Schererville state representative and town court judge, and past treasurer of the Indiana Republican Party; Matthew Whetstone, a Statehouse lobbyist and former Republican member of the Indiana House; and Dan Hasler, a former Indiana secretary of commerce under Republican Gov. Mitch Daniels.
The IGC rule provides that Spectacle must repurchase the shares of any investors unable or unwilling to obtain a level 1 IGC license.
Representatives for the IGC and the Spectacle investors did not immediately respond to requests for comment on the ruling.
It's not known whether the continuing uncertainty over the status of the Spectacle shareholders will affect the IGC's annual renewal of the Gary casino owner's license that's due to be considered Thursday.
An Indiana casino cannot operate without a valid IGC license.