The Eastern Band of Cherokee Indians (EBCI) has signaled its interest in acquiring the Caesars Southern Indiana of Las Vegas giant casino Caesars Entertainment Inc.
The Tribal Council last Thursday approved a financing plan for various due diligence procedures before potentially acquiring the newly renovated, expanded and renamed property.
Caesars Southern Indiana opened in 1998 as a river casino. In 2018, Caesars started a $ 90 million expansion to relocate the casino to the mainland, renovate its existing adjacent hotel, and add new facilities such as restaurants, bars and other new experiences.
The operator unveiled in late 2019 a 110,000 square foot casino floor with 1,650 slot machines, table games and a sports betting house. The expanded and renovated property, which previously operated as Horseshoe Southern Indiana, was renamed Caesars Southern Indiana.
A 2015 law allowed river casinos to build and operate land-based gambling venues at adjacent sites. Caesars officials decided that a river casino it was no longer a profitable option and that relocation to the mainland was a necessary measure to ensure that Caesars Southern Indiana did not become obsolete.
Advance Purchase Talks
During a regular session last week, the EBCI Tribal Council passed legislation outlining the funding for various due diligence efforts related to the possible acquisition of Caesars Southern Indiana.
As stated in the legislation, the tribe and Caesars have drawn up a letter of intent that expresses the tribe’s interest in purchasing the hotel-casino complex, if the parties involved “They can agree on the terms of the transaction.”
Under the terms outlined in the letter of intent, Caesars will work exclusively with the tribe for 45 days from the date the casino operator signed the latter and will not “accept offers from other potential buyers” from Caesars Southern Indiana.
Recently approved legislation establishes that tribe due diligence costs will be around $ 500,000 and that tribal officials should hire subject matter experts who will review the financial and legal details of the casino, as well as all the “engineering, structural and environmental aspects” of the property.
Another $ 10.11 million will include “unavoidable costs such as regulatory license fees, debt financing fees, insurance, and other costs. ” The tribe will use $ 150,000 to pay for legal advice in southern Indiana and $ 1.5 million to pay the Brownstein Hyatt Farber Schreck law firm currently under contract with the tribe.
During last week’s session, the tribal chief, Richard G. Sneed, said that what the tribe intends to buy is “cash flow – a business with a known amount of cash flow and a known return to the tribe. ”
He added that they are “looking at everything from top to bottom, inside and out – IT systems, structural system, financial systems, revenue” and that they “will examine every last detail before signing on the dotted line.”