Full House hosts New Haven event, but faces minefield in sought move
Full House Resorts details its proposed plans for a new casino in New Haven and some of the key points for how it intends to make Rising Sun and Ohio County whole if – and we can’t emphasize enough the conditional nature of this noun – the company is allowed by the legislature to move its Rising Star Casino Resort license from the Cincinnati market to New Haven.
There are lots of moving parts here in this matter of first impression (the Gary license move to Terre Haute involved one of two Gary licenses), including legislative approval of a move, competition from other communities to host a moved casino, local approval of a casino, and competition from other companies for the right to open a new casino in a new community . . . but for now, upfront, we’ll detail for you what we know about what Full House would like to undertake in its ideal world, and then we’ll take you on a tour of the umpteen assorted opportunities for these plans to run off the rails.
Full House, as we were first to tell you, would like to move its Ohio County casino license to what is seen as the state’s largest unserved market, Allen County, home to the state’s second-largest city, Fort Wayne. After making its current host community whole, Full House proposes to develop a state-of-the-art casino and entertainment destination on the northeast edge of New Haven, a growing Fort Wayne suburb that is in the process of branding itself with the “Destination New Haven” label, trading on development that would also include a major sports complex, and an International Harvester museum.
The proposed project would be sited at the U.S. 24 interchange with I-469 and U.S. 30, one exit north of where we originally believed Full House was targeting. Full House takes pains to note that the site – which would be annexed into the city – is located “away from residential communities, schools, and churches.”
The 65.5-acre optioned location is on Harper Road and Doyle Road off U.S. 24 near the archaeologically recovered Gronauer Lock, once part of the Wabash and Erie Canal (an ideal landmark for the kind of locally themed bar or restaurant that casinos love to show connections to their communities!). Harper Road, incidentally, is named after the great-great grandparents of former Rep. Mitch Harper (R) of New Haven, the 2015 Fort Wayne Republican mayoral nominee.
Full House bills its New Haven project as “a committed investment of at least $500 million from Full House, with at least half of that investment occurring in the opening phase.”
The minimum first phase investment would be $250 million for the casino itself, and we need to remind you that in the 30 years of development, no operator has ever failed to exceed its initial spending estimate.
The Proposed Project
The initial (minimum) $250 million casino Phase 1 investment would fund the casino and sportsbook, a prime steakhouse; a celebrity-chef upscale casual restaurant; a food hall populated by local proprietors; an entertainment lounge; a high-energy center bar; and a speakeasy cocktail bar. This could take as long as three years, according to company officials . . . but we’re not sure what point they were using as the starting line (today, from legislative approval of a move, or full local approval of this particular project or other permutations).
The casino is projected to collect revenue of $206.0 million in its first year of operation (about $17.17 million per month, in between, for example, the current regular run of revenue for Horseshoe Casino Hammond and Ameristar Casino East Chicago.
An anticipated Phase 2 buildout would add a second $250 million (minimum) investment tranche to the project, funding a 200-room luxury hotel; a premium spa and salon; a live event/concert venue; and additional dining and entertainment venues. Unlike other Full House preliminary presentations for other venues, corporate officials did not share renderings of the proposed casino or hotel complex.
By year five and full buildout, Full House projects annual casino revenue of $288.7 million, or some $24.06 million per month. That figure would today place it third in the state in revenue, effectively in between the current amount of dollars brought in by Horseshoe Indianapolis and Caesars Southern Indiana.
According to the company’s presentation to the community, the New Haven development is expected to generate an estimated $75 million in annual gaming taxes. Upon opening, the project is projected to generate approximately $5.4 million in local property taxes, increasing to $10.9 million following completion of the second phase. Additional revenue will be generated from the innkeeper’s tax, food and beverage tax, and local income tax.
The project is anticipated to create thousands of direct, indirect, and construction jobs throughout the region. “Full House Resorts is in discussions with the City of New Haven to explore ways to provide tax relief to the community from the revenue generated, as well as strengthening public safety services prior to opening.”
The Community Reaction
Flying solo, Full House hosted a community information forum on September 23. The event was well-attended, a standing room-only event that organizers estimate attracted some 200 people, and the Fort Wayne Journal Gazette pegged at “an estimated 500.” The event was followed the next day by a Full House presentation to a receptive New Haven City Council at a meeting with a much larger than usual turnout.
The community forum included a presentation from Full House explaining its history, philosophy, and properties; plans for New Haven; and the potential economic impact. Officials took questions (and listened to some who simply laid out their concerns – such as increased crime; drinking and driving; prostitution; problem gambling; and degeneracy – or their opposition) as the event lasted some 90 minutes, and stayed around for as long as three hours to accommodate one-on-one questions and address concerns.
Several protesters – with their young children – milled around outside the community center forum site waving homemade anti-casino signs (in contrast to other such events decades back when protestors were far better organized and funded), and some during the session raised concerns about infrastructure, unaware of company commitments to fund road improvements at the site and underwrite additional city costs, such as for public safety.
What’s Next
Legislative approval would be required for moving a license, but the informal condition precedent would be securing an agreement with Rising Sun and Ohio County for an equitable exit. We had speculated about a mega one-time exit fee or a multi-year installment plan triggered by departure (perhaps three to five years from now), but now we’re hearing that the runway looks to be considerably longer, lasting some two decades for the state’s smallest property, which opened this week in 1996.
Full House Senior Vice President and Chief Development Officer Alex Stolyar, who is honchoing the effort for Full House (after doing the same for earlier efforts aimed at Terre Haute circa 2015 and 2021, and Indianapolis in between) tells Marek Mazurek of Inside INdiana Business that he’s not viewing the
exit agreement as the equivalent of a “hold harmless” provision we’ve seen elsewhere around the state from other earlier laws.
Full House is reportedly offering to make payments to Rising Sun for at least 20 years, an unprecedented offer outside of law.
Mazurek interprets Stolyar’s comments to mean that “Full House wants to make the move a win for all parties involved. “This goes well beyond” hold harmless, Stolyar explains. “The goal here is not only to have them be on an equivalent financial standing as they are with our casino here, but to have them be better off. That’s what we’re working on.”
And the fact that no one seems to be leaking any information nor negotiating through the media would suggest that this dance seems to be meeting the approval of both partners . . . but we don’t know yet what might be transpiring with Ohio County officials.
We also don’t know if the amounts to be paid for engineering an exit would be considered as deductible from gross gaming revenues from a potential future casino in Allen County, or if Full House would assume the commitment from post-tax corporate funds.
We also have not heard about where Full House and local officials stand about the disposition of the pavilion, gaming vessel, two hotels, parking lot and RV park, ferry and ferry landings, and golf course.
While lawmakers would be reluctant to begin the license transfer process absent full sign-off from the current host community, should that approval be forthcoming, that opens a whole new vista . . . and here’s how we see it.
Full House and New Haven have been actively courting key local lawmakers – some of whom are traditional gaming opponents, some agnostic, and a few even receptive. They are pleased with the feedback they have received . . . but note that solons have largely only been hearing about the binary choice presented, and if other companies decide to glom on and advance their own respective agendas, this will undoubtedly complicate things.
The initial hurdle would be whether legislative leaders are willing to lift the moratorium on gaming bills that they have enforced through the past few sessions over concerns about an ongoing federal grand jury investigation of the gaming industry and related convictions of former lawmakers amid tantalizing federal revelations of investigatory tactics. That the ongoing probe seems to still focus on the 2019 omnibus legislation that involved a license transfer might make new legislation problematic.
But assume that obstacle can be surmounted and leaders decide to allow a limited number of gaming topics to be considered. We’ve told you that an omnibus bill for 2025 would likely start in the House and include online options for the Hoosier Lottery, iGaming, and electronic pull-tabs of some sort for veteran service organizations.
You should expect a separate bill to address the license transfer; while it might ultimately be combined in the House bill, there are enough concerns about its potential radioactivity that it would not be part of the initial package. Concerns about receptivity by the Senate also would suggest the bill begin there, and we expect industry-friendly Senate Committee on Public Policy Chair Ron Alting (R) of Lafayette to author the bill.
What we’ll be watching: How Senate President Pro Tem Rodric Bray (R) of Martinsville – who traditionally has been personally chilly toward gaming measures – will populate the panel. Three members (one a Democrat) are only on the panel because they filled in for their predecessor upon their respective election to the Senate by party caucuses. One committee member who won’t be back is former Sen. Mark Messmer (R) of Jasper, who as Senate majority floor leader carried the 2019 omnibus bill.
You will also need to watch how the lobbying effort on this concept shapes the language. Will the bill allow any community to compete for a transferred license, and, if so, how? Will a referendum be required in any community (more on this later)? Will any operator be allowed to compete for the new license, as was the case in Vigo County – where we even saw a company that wasn’t ever involved in Indiana swoop in to make a bid (albeit unsuccessfully). What fees will be imposed? While some recall the $20 million and $5 million relocation fees under the 2019 omnibus bill, those were site-specific and will likely be revisited . . . with former Senate Committee on Appropriations chair Luke Kenley (R) of Noblesville no longer around to drive that debate and exact maximum value for the State. There will also be other considerations, such as how general to make the language to facilitate other license moves going forward, and the issue of whether or how to tax a potential Full House long-term payment to its current host community.
Could there be other casinos that might be interested in making a move, and look to consolidate their lot with the Rising Star relo measure? We’re hearing, for example, that the decision by Hard Rock Casino Northern Indiana to collaborate with the City of Gary on a proposed Lake County convention center authorized by the legislature (Hobart and Merrillville are also competing for the right to host the facility) has raised the ire of Hammond officials. If consummated, the Gary deal would likely see a fancy new 145,000-square-foot facility – and the long-sought casino
hotel – be built directly adjacent to the state’s top-grossing casino, further cutting into the revenues of Horseshoe Casino Hammond.
Should Gary’s proposal move forward, look for Hammond to seek legislative permission to move its gaming platform from the Hammond Marin to an inland, more visible and lucrative location that would also allow for a hotel to be built as part of the package. Query as well whether this might also be an opportunity for Caesars Entertainment, Inc. to part ways with Hammond after deteriorating performance, concerning local management changes, and lack of significant recent capital investment has proven frustrating locally.
So there are lots of moving parts here that can complicate things (we also have not heard anything new about the Miami Tribe of Oklahoma, and what plans it might have for its new tribal land in Fort Wayne).
And there is also one more that seems to have split the Allen County area.
Nathan Gotsch, a local community advocate and filmmaker, who served as the Indiana state director for Business for America (where he took the lead in creating the Indiana Business Alliance for Civics, a coalition of Hoosier businesses working to increase voter registration and improve voter participation), uses a Fort Wayne Journal Gazette op-ed to push for a local referendum.
“If Full House were requesting a new license, it would be required by state statute to hold a referendum in New Haven, which would give each citizen the ability to vote yes or no on the casino. That’s not the case for a license transfer, however,” he writes, noting though that “legislators could write a referendum requirement into their bill for this one.” He notes that former Rep. Harper, “a New Haven native who served as the city’s state representative from 1978 to 1990,” and former chair of the House Committee on Local Government, “told me that’s what he thinks they should do. After all, whether Full House applies for a new gambling license or transfers the one from Rising Sun, the result is the same for the people of New Haven: a giant casino that will have a significant impact on the future of their city. One can debate whether that impact would be good or bad, but it’s hard to argue that New Haven residents shouldn’t have a say.”
Gotch also points to puzzling comments by Sen. Andy Zay (R) of Huntington, “whose district is 20 miles from the proposed complex” to Kayla Blakeslee of WOWO 1190-AM in late September, in which Sen. Zay flatly states, “there will not be a referendum.” Gotsch adds, “He made that declaration despite the fact that Full House’s plans were only unveiled to the public on Monday and the license transfer bill – which cannot be introduced until the Indiana General Assembly goes into session in January – presumably has not yet been written, let alone finalized. Why would Zay and his colleagues want to pass a bill without letting the citizens of New Haven weigh in? It might sound paranoid to suggest there could be inducements for shepherding the license transfer through the statehouse. But that’s exactly what happened the last time a gambling company wanted to relocate an underperforming Indiana casino.”
So what did Sen. Zay actually say? After noting that “we are a very church-going, faith-built community,” he highlighted the positives of such a project, noting how it seems to dovetail with new Haven’s destination plans, and how a casino complex could mean “potentially a million visitors coming to our area; any other corner of the state would be, you know, hungry for that.” Zay adds, “when you talk about a community that has a budget of $60 million, and this one entity bringing in $60 million in tax revenue, it’s a big deal.”
But when Blakeslee asks him whether there would be a referendum, Here’s what the senator tells her: “The simple answer is no. There won’t be a referendum. We are elected to make decisions like this. The citizens will work through their legislators and will need to make their voices and opposition or support well known to us, and particularly their local legislators and then we will – a piece of legislation will be drafted and work its way through the committee. It will be considered and voted on over 13 times with the opportunity to be amended, I think up to four to six times. The democratic process, the legislative process is very transparent, very open, and very accessible to the public. If this is an issue for people, they need to weigh in on that.”
Sen. Zay adds, “We are responsive to our constituents. We’re elected by our constituencies on our districts, and that’s who we need to hear from.”
Pressed again as to whether he backs a plebiscite, He answers curtly, “No. We can ‘referendum’ everything, and you’re really taking away the role of the legislator. It is our job to put our views, put ourselves out there, make ourselves available through town halls and others, which is one reason I showed up the other evening. And we need to hear from our constituents, and we need to go make those decisions whether they’re in alignment with everybody, in alignment with half, you know, there’s tough decisions that need to be made. But I don’t think that in the democratic republic that we live in and how we operate that we can put everything that becomes contentious on a ballot for a referendum. I think that’s the job of the legislators, and it’s our job to get out there and get a sense of the community and what they want and what they don’t want and make those votes.”
So while Full House is portraying this as a binary choice between allowing it to move from Rising Sun to New Haven or not, there are a plethora of items that need to be decided by others than the three ostensible parties . . . and it will be far more complex than it’s been perceived by New Haven residents, many of whom believe that this seems to be a done deal. If you happen to know any of those folks, they could probably benefit from a subscription to your favorite gaming newsletter to track what will certainly be an interesting journey