Eastern Band of Cherokee Indians Approve Funding for Caesars Southern Indiana Takeover
Just days after the Eastern Band of Cherokee Indians (EBCI) tribal council voiced its collective opinion to purchase the Caesars Southern Indiana property, it went back on its decision. The leaders of the Sovereign Nation held meetings behind closed doors, the results of which are yet to be publicized.
The council voted to approve the spending plans on Thursday, as posted on the Cherokee One Feather, the tribe’s official mouthpiece. The publication, however, did not post the information on its website. The Smoky Mountain News also noted it was a closed-door vote but did not reveal the final tally.
According to the discussions held on December 15, the members had until December 21 to arrive at a conclusion with Caesars Entertainment on the deal. The EBCI secured a 45-day negotiating window back in November after submitting the top bid out of 20 other entries. The tribe earlier approved the creation of a limited liability company to purchase and operate the commercial casino.
Tribal Commission Approves Funding
EBCI Principal Chief Richard Sneed previously declined to comment on the acquisition plans. Caesars Entertainment remains silent on the issue too. As per the original plan, the EBCI would invest $120 million from the tribal fund and borrow $160 million to purchase Caesars Southern Indiana.
The council previously approved funding. However, post the December 15 meeting, some of the members raised concerns about using five tribal funds. Key points from the meeting include spending from a sinking fund set aside for debt repayment and an endowment fund that Council Member Chelsea Saunooke wasn’t too convinced about.
According to Saunooke, “The fund is set up to secure the tribe’s future, and it needs to be double that of the tribe’s operational budget at all times. I’m not too comfortable with an operational budget of a certain amount, and we barely have 18% of endowment”.
The agreement was later amended, and the changelog read, “The tribe is dedicated to identifying the most advantageous funding mechanism to raise the remaining equity”. The commission also failed to disclose the final voting numbers.
Why Caesars Entertainment Must Let Go of Southern Indiana
Caesars Entertainment’s recent merger with Eldorado Resorts required the firm to sell three of its five casinos to comply with the Indiana Gaming Commission’s adjusted gross revenue. Caesars announced the sale of Tropicana Evansville to Twin River Worldwide Holdings in October and the property is currently known as Bally’s.
Caesars received a deadline extension until December 31, 2020, to sell Horseshow Hammond back in November from the IGC. However, that does not apply to Caesars Southern Indiana. The commission must also approve the sale. In the meantime, Vici Properties, a publicly-traded gambling investment holdings company, continues to own the property.
The sale arrives within a year of Caesars investing $90 million to move the property from an anchored riverboat to 80,000 sqft on land. It remains to be seen if Caesars continue to manage the property or the tribe partners with a second firm.