Ratcliff sues Indiana Gaming Commission for suspending his license

Longtime casino executive Rod Ratcliff is suing the Indiana Gaming Commission for suspending his gaming license last month.

In a lawsuit filed Tuesday in Lake County Superior Court, Ratcliff argues that the commission violated his right to due process and says he believes the commission is trying to force him to sell his interests in the new Gary casino to Hard Rock International, a partner in the project.

In December, the Gaming Commission suspended Ratcliff’s occupational gambling license for 90 days after tying him to a federal investigation involving campaign finance violations.

“By operating outside of its legal scope and unfairly judging Mr. Ratcliff as guilty by association, the Indiana Gaming Commission has created a problem where none existed and delayed what will be a significant contributor to the Lake County economy,” Robert Vane, a spokesman for Ratcliff, said in a statement. “Mr. Ratcliff and his team have been working to meet the demands of the Commission, but he will not surrender his constitutional rights in the process.”

Ratcliff previously served as chairman and CEO of New Centaur LLC, which owned the state’s racetrack casinos before selling them to Caesars Entertainment in 2018, and as CEO and chairman of Spectacle Entertainment, which he helped found after selling Centaur.

Spectacle Entertainment now operates the Majestic Star I and Majestic Star II casinos on Lake Michigan and is partnering with Hard Rock to construct a $300 million land-based casino in Gary that will replace those riverboats.

In September, federal prosecutors indicted former state Sen. Brent Waltz and casino executive and former state lawmaker John Keeler on charges related to violating federal campaign finance laws. Keeler had been an executive at both New Centaur and at Spectacle.

According to the U.S. Attorney’s Office, Keeler allegedly helped conduct a straw donor scheme to funnel thousands of dollars from New Centaur to Waltz’s unsuccessful 2016 congressional campaign.

According to the indictment, an unnamed New Centaur executive met with a Maryland-based political consultant at the Indianapolis airport to set up the scheme.

In the emergency order that the Gaming Commission issued in December to suspend Ratcliff’s license, the commission identified Ratcliff as that executive. Ratcliff has not been charged criminally and is not named in the federal indictment.

Also in December, the commission ordered Ratcliff and Spectacle to remove him as a trustee of the Roderick J. Ratcliff Revocable Trust and replace him with someone acceptable to the commission.

In the lawsuit, Ratcliff describes the commission’s decisions as “hasty and ill-conceived.” He is asking the court to void both of the commission’s orders because he was not afforded his right to due process and he believes the commission’s actions were based on “unsubstantiated, unfounded and politically motivated” claims against him.

“Under Defendants’ twisted logic, every rumor the Gaming Commission heard about a license holder would constitute an emergency because the subject of the rumor was operating a casino,” the lawsuit says. “That is not the law.”

The lawsuit argues that the commission should have conducted an evidentiary hearing, where Ratcliff or his attorneys would have been able to cross examine the witnesses and provide evidence, before suspending his license.

Ratcliff did not attend the December meeting of the Gaming Commission, but his attorneys were allowed to make a presentation.

Ratcliff is also fighting the order requiring him to appoint someone the commission approves of to oversee his trust. In the lawsuit, he says that would mean someone the Gaming Commission appoints would essentially be overseeing all of his personal assets, because his trust isn’t only tied to the casinos.

Ratcliff resigned from his position as CEO of Spectacle Entertainment in June but maintained an ownership stake in the company and was responsible for investor relations. The commission received paperwork from Spectacle confirming his termination from the investor relations role Dec. 3.

The day before the commission’s December meeting, Ratcliff’s attorneys sent the agency an agreement for him to sell his remaining shares in Spectacle Entertainment to Greg Gibson of Spectacle Jack, a company that used to be subsidiary of Spectacle Entertainment that is overseeing construction of the new Terre Haute casino in partnership with Hard Rock.

In the lawsuit, Ratcliff claims he already satisfied the commission’s order to give control of his trust to someone else, because of this agreement he reached with Gibson on Dec. 22.

But that agreement is contingent on approval from both the commission and Hard Rock, and that has not occurred.

Indiana Gaming Commission Executive Director Sara Gonso Tait notified Ratcliff on Tuesday that he was in non-compliance with the order, according to the lawsuit.

Ratcliff claims in the lawsuit that the Gaming Commission’s actions in December were the equivalent of imposing “a death sentence” on his ability to sell his interests to whomever he’d like and repeatedly says he believes the commission is trying to force him to sell his interests to Hard Rock.

According to the lawsuit, Hard Rock has made two offers to buy Ratcliff’s shares, but Ratcliff considered both offers to be too low.

“When the curtains are pulled back, Defendants’ actions evidence an apparent motivation to push Ratcliff out in favor of Hard Rock—the minority member in the project—so that Hard Rock can fully own and operate the Hard Rock Casino Gary,” the lawsuit says.

Ratcliff also claims that the commission’s actions have jeopardized the future of the Hard Rock Casino Gary, which initially planned to open in March. According to the lawsuit, the casino opening has been delayed until at least April.

At the December meeting, Tait ordered Spectacle to stop moving equipment from the riverboat casinos in Gary to the new land-based facility “until further notice.”

“These repercussions may well further delay, compromise, or lead to the cancellation of development of the Hard Rock Casino Gary,” Ratcliff’s lawsuit says.

Ratcliff has also formally requested an evidentiary hearing to challenge the emergency order with the Gaming Commission. The Gaming Commission is responsible for setting that hearing. It is unclear whether that has occurred. A spokesperson for the Gaming Commission did not respond to IBJ’s request for comment.