Cherokee Tribal Council Voted Down a Protest Against Southern Indiana Casino Acquisition

Article by : Helen Feb 1, 2021

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While some are not satisfied with the deal the Eastern Band of Cherokee Indians struck with Caesars to acquire the Caesars Southern Indiana Casino business, it will still stand. The Tribal Council voted against the protest on January 14, with 44 out of 100 votes cast in its support. This was the first item on the Council’s agenda, and the vote itself was preceded by a lengthy discussion of the deal – although the opponents’ arguments didn’t manage to convince the majority of the legislature.

The formal protest was filed soon after the Tribal Council voted in support of the $250-million deal on December 17 by 14 tribal members, including two current Tribal Council members and a former principal chief. According to the arranged deal opponents, the decision violated the tribe’s Charter and Governing Document (the principal piece of legislation akin to the Constitution).

The main reason the acquisition of Caesars Southern Indiana Casino was met with considerable opposition is that the tribe will have ownership only over the business operations itself. The property’s real estate will remain under the ownership of VICI Properties, Inc., and the tribe will have to pay up $32.5 million in annual lease fees.

Another issue the opponents of the deal point out is that the Tribal Council didn’t specify where the initial down payment, $130 million, will come from. Besides, the five-percent interest rate offered for paying off the purchase-related debt is considered “far higher than should be expected in the current economic climate.” The whole deal seemed too rushed to Birdtown Representative Albert Rose. He claimed that the Tribal Council members got their hands on the final draft of the agreement hours before voting on it.

When we set Kituwah LLC up, we vetted it out right there in the chambers how we wanted the board set up and what the qualifications were for the board. I have asked for several work sessions on making amendments to the management agreement and have yet to be granted a work session to go over the management agreement.

At the time of reaching a “definitive agreement” on the acquisition, Richard Sneed, Principal Chief Eastern Band of Cherokee Indians, said the deal “marks the beginning of an exciting new future for the Eastern Band of Cherokee Indians,” adding, “We [Eastern Band of Cherokee Indians] are pleased to build upon our long-standing partnership with Caesars as we look to advance our interests in commercial gaming in the coming years.”

He also added during the Tribal Council meeting on January 14, “This decision was thoroughly vetted, and every decision we make is in the best interest of the Tribe. If anyone wants to sit down and go over the numbers, we’re happy to do that. The assertions made in Mr. Saunooke’s resolution, they’re all patently false.”

Now that the Tribal Council has officially shut the opposition down, the acquisition deal is expected to proceed as planned and be closed in the third quarter of 2021. The casino is expected to bring the tribe between $3 and $5 million in profits a year, while the whole venture is projected to earn around $40 million a year in EBITDA. (Indiana laws allow for 25% of LLC’s EBITDA to be remitted directly to the tribal budget.)

Caesars had to put up its Southern Indiana Casino for sale after the merger with Eldorado Resorts in July 2020. The deal created the largest casino and entertainment company in the U.S. In some states (Indiana is one of them), it evoked the market share laws meant to protect fair competition. Under these laws, regulators required Caesars to sell some of its properties to avoid creating a monopolistic position for it in the market.