- Indiana will not introduce legislation to legalize online poker and casino gaming in 2024 due to a corruption scandal involving a former lawmaker.
- Former Rep. Sean Eberhart admitted to taking a bribe from gaming company Spectacle Entertainment, tainting the statehouse’s reputation.
- The scandal could hinder efforts to pass casino gaming and online poker in Indiana beyond 2024, according to Senate President Rodric Bray.
- Eberhart, promised a lucrative job at Spectacle, now faces a maximum sentence of five years in prison, a hefty fine, and probation.
- The news disappoints the gaming industry, as Indiana was considered a potential next state to expand igaming.
- The case against Eberhart began unfolding in 2018, with alleged license transfers and unlawful incentives involving Spectacle Entertainment.
It taints the statehouse. It diminishes the confidence that people have in the integrity of the statehouse. Lawmakers in Indiana said they will not introduce legislation to expand igaming in the state in 2024 and could have a hard time getting such legislation to pass for the foreseeable future after a former lawmaker and igaming supporter agreed to plead guilty to federal corruption charges earlier this month.
Former Rep. Sean Eberhart (R-Shelbyville) admitted to taking a bribe from Spectacle Entertainment, a gaming company that wanted to relocate state gaming licenses from two gaming boats on Lake Michigan in Gary to two inland locations.
According to public radio WBAA-FM, House Speaker Todd Huston (R-Fishers) and Senate President Pro Tempore Rodric Bray (R-Martinsville) agreed that the scandal means any legislation to launch online casino gaming and real money online poker in Indiana is now a non-starter.
“It taints the statehouse,” Bray told the station. “It diminishes the confidence that people have in the integrity of the statehouse.”
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Bray added that the scandal could hamper efforts to expand igaming beyond 2024. “It causes an awful lot of problems, and it makes it particularly difficult to engage in that kind of policy,” he said.
Prosecutors allege that Eberhart, while a House Committee on Public Policy member, was promised a job at Spectacle with an annual salary of at least $350,000.
Eberhart faces a maximum sentence of five years in prison, a $250,000 fine, and three years of probation following any prison term, according to documents filed with the US District Court for the Southern District of Indiana.
The court is not bound by any sentencing guidelines or recommendations. Eberhart has agreed to pay $60,000 in restitution, the amount of his legislative salary. The FBI investigated the case.
Bad News for Industry
News that there likely won’t be any expanded igaming in Indiana in 2024 is a bitter disappointment for proponents — and the gaming industry. The Hoosier State has been on the “short list” of the next states to expand igaming for some time.
Lawmakers introduced bills to legalize online poker and casino gaming in 2021, 2022, and 2023, with each effort dying in committee. There was optimism that 2024 could be different, especially after Spectrum Gaming Group said in a 2022 report that online poker and casino gaming wouldn’t cannibalize revenue from the state’s land-based casinos.
The most recent bill, HB 1536, would have authorized the state’s 13 land-based casinos, including riverboats and racinos, to have three skins for igaming. The bill also would have authorized Indiana to join a multi-state gaming compact for online poker, such as the Multi-State Internet Gaming Agreement (MSIGA).
Four poker operators — BetMGM, PokerStars, Rush Street Interactive (RSI), and WSOP — were projected to form partnerships to launch online poker in Indiana.
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Scandal Brewing Since 2018
The scandal unfolded more than five years ago, according to court documents.
In July 2018, Caesars acquired Centaur Holdings LLC, which operated the state’s casinos and off-track betting (OTB) facilities, including the Indiana Grand Casino and Racetrack in Shelbyville — Eberhart’s hometown. Caesars rebranded the Indiana Grand as Horseshoe Indianapolis in January 2022.
Former executives at Centaur created Spectacle following the sale of Centaur to Caesars. Spectacle and then-CEO Rod Ratcliff hoped to transfer licenses from its two floating casinos in Gary — the Majestic Star and the Majestic Star II — to two inland locations.
Specifically, Spectacle aimed to transfer one license to a land-based property in Gary and a second license for a new casino in Terre Haute. A gaming bill championed by Eberhart in 2019 called for Spectacle to pay a one-time “transfer fee” of $20 million rather than the $100 million required by law for a license transfer. The bill also qualified Spectacle for certain tax incentives.
The bill, HB 1015, passed and was signed by Republican Governor Eric Holcomb into law in May 2019.
One of the transferred licenses went to Hard Rock Northern Indiana, which opened in May 2021. The Indiana Gaming Commission (IGC) forced Ratcliff to relinquish his stake in the property in August of that year. IGC rejected selling the license for a casino in Terre Haute to a Spectacle co-founder — opening the door for Churchill Downs Incorporated (CDI) to build the facility.
CDI expects to open Terre Haute Casino Resort in early 2024. The facility was formerly called the Queen of Terre Haute Casino.
The case is US v. Eberhart (No. 1:23-cr-170-MPB-TAB).