The Eastern Band of Cherokee Indians (EBCI) has signaled interest in purchasing Caesars Southern Indiana from Las Vegas casino giant Caesars Entertainment Inc.
Tribal Council approved this past Thursday a funding plan for various due diligence procedures before potentially acquiring the recently renovated, expanded, and rebranded property.
Caesars Southern Indiana opened doors in 1998 as a riverboat casino. In 2018, Caesars broke ground on a $90 million expansion to relocate the casino onto dry land, renovate its adjacent existing 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 sportsbook. The expanded and revamped property, which previously operated as Horseshoe Southern Indiana, was renamed Caesars Southern Indiana.
A 2015 law allowed riverboat casinos to build and operate land-based gambling venues on adjacent sites. Caesars officials decided that a riverboat casino was no longer a profitable option and that the relocation onto dry land was a needed move to ensure that Caesars Southern Indiana did not grow stale.
Early Acquisition Talks
During a regular session last week, the EBCI Tribal Council passed legislation outlining funding for various due diligence endeavors related to the potential acquisition of Caesars Southern Indiana.
As stated in the legislation, the tribe and Caesars have penned a letter of intent that expresses the tribe’s interest in purchasing the hotel-casino complex, if the involved parties “can agree on terms for 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 “entertain offers from other potential buyers” of Caesars Southern Indiana.
The recently approved legislation stated that the tribe’s due diligence costs will be around $500,000 and that tribal officials must 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.
An additional $10.11 million will include “unavoidable costs such as regulatory licensing fees, debt financing fees, insurance, and other costs.” The tribe will use $150,000 to pay for legal counsel in Southern Indiana and $1.5 million to pay to the Brownstein Hyatt Farber Schreck law firm that is currently under contract with the tribe.
During last week’s session, tribal Principal Chief Richard G. Sneed said that what the tribe intends to purchase is “cash flow – a business with a known amount of cash flow and a known return to the tribe.”
He added that they are “having everything looked at from top to bottom, inside and out – IT systems, structural system, financial systems, the revenue” and that “every last thing is going to be vetted before we sign on the dotted line.”
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