Yesterday, the Tribal Council of the Eastern Band of Cherokee Indians (EBCI) voted 10 to 1 to table a resolution that would have given the tribe the chance to make progress with the $290-million deal to acquire the Caesars Southern Indiana Casino gaming operation.
As a result of the merger between Caesars Entertainment and Eldorado Resorts that took place in July, the business was up for a sale. The deal between the two companies ended up creating the biggest casino and entertainment operator on a global scale. However, the newly-combined company faced some antitrust laws restrictions in some US states, under which it was forced to sell off some of its operations. The Ceasar’s Southern Indiana Casino is exactly one of those properties.
Principal Chief Richard Sneed presented the resolution asked Tribal Council to give the green light to an upfront payment amounting to $130 million, as well as a $160 million loan that is set to be paid off at 5% interest over a 5-year period.
In mid-November, a resolution was passed by the Tribal Council with five votes and three votes against the authorization of Principal Chief Sneed to proceed with due diligence on the property before it entered into an acquisition deal. Caesars Entertainment has to make such an agreement in order to let go of the property by the end of 2020.
Tribal Council Members Want More Information about the Casino Acquisition
Tribal Council members, however, had required more information about the project and asked for more key details regarding the deal. In particular, several members recalled a closed-door meeting that had taken place on the previous day and asked why tribal members had not been given the right to access it.
Richard French, a Big Cove Representative, shared that, in his opinion, the situation could have been a lot different in case the meeting had been accessible to everyone.
On the other hand, some members of the Tribal Council had questions regarding the source of the deal’s funding. According to information released by the Council, the proposal was set to fund the initial $130-million investment through the Endowment Funds 1 and 2, the Business and Economic Development Fund, the Debt Service Sinking Fund and the Cherokee Sovereign Wealth Fund. however, no specific information about the money provided by any of the aforementioned funds was provided. The tribal Finance Secretary Cory Blankenship explained that he could provide a more specific proposal in case he had been given some more time to gather the required details.
Currently, the money that is to be used as funding, is in investment funds, which generate a 6% to 8% return. As previously revealed, a return between 19% and 23% is expected to be yielded by the casino investment. However, under Indiana State Legislation, a new entity that needs to be created by the tribe could remit up to 25% of the profits directly back to the tribe on an annual basis. The remaining funds could be used as an investment in similar commercial gambling opportunities in other states across the US.