Members Petition EBCI Tribal Council to Reconsider Caesars Southern Indiana Purchase

Posted on: January 7, 2021, 06:22h.

Last updated on: January 7, 2021, 09:34h.

Nearly three weeks after the Eastern Band of Cherokee Indians voted to go ahead with the purchase of Caesars Southern Indiana, a group of tribal members has filed a petition seeking to overturn that decision. The group includes a former chief and two sitting Tribal Council members.

Caesars Southern Indiana
Caesars Southern Indiana
The Eastern Band of Cherokee Indians entered into an agreement to buy Caesars Southern Indiana, seen here in an undated picture. Now, 14 tribal members want the EBCI Tribal Council to reconsider that deal. (Image: WLKY-TV)

According to the Smoky Mountain News, the petition takes issue with several items that led to the council vote on Dec. 17. It claims that the special meeting did not meet the requirement for an emergency session. It also claims the limited liability company the tribal nation established to run commercial gaming operations runs afoul of the EBCI charter.

The 14 individuals also raise concerns about spending $250 million, including up to $120 million from tribal endowments, on the purchase of a casino during a time of economic uncertainty.

Purchasing another gaming facility during a pandemic and with the knowledge that gaming facilities across the country are losing revenue is a fool’s errand,” the resolution reads, according to the Smoky Mountain News.

According to the paper, petitioners include former Principal Chief Michell Hicks and two current EBCI Council members, Albert Rose and Bo Crowe.

Principal Chief Richard Sneed has led the charge for EBCI to expand into commercial gaming. The sovereign nation owns 57,000 acres of property in western North Carolina and operates two casinos on that land. However, another tribal casino being built near Charlotte could have about a $100 million annual impact on the Cherokees.

Concerns About Indiana Law

On Dec. 24, a week after the Tribal Council approved purchasing the casino in a 48-45 vote, Caesars Entertainment announced it reached an agreement to sell the casino to the tribe.

Caesars was under pressure to sell the casino by Dec. 31 in order to meet an Indiana Gaming Commission requirement to sell three of its five properties. IGC commissioners required that when they approved the Eldorado Resorts takeover of Caesars last July.

In order to operate a commercial casino, tribal leaders needed to establish a privately held company. The tribe owns 100 percent of that company, EBCI Holdings LLC. However, it’s possible that only two of its five board seats will go to enrolled EBCI members. Initially, the Tribal Council will appoint the board members. But eventually, the company will take over new appointments.

Another concern with purchasing Caesars, according to a member who spoke anonymously with Casino.org, is an Indiana gaming law that caps how much revenue owners can take from their properties.

Under tribal casino law, EBCI gets full control of the revenues its two Harrah’s casinos generate. Part of that money goes to twice-yearly direct payments to enrolled members, with the EBCI government receiving the rest. According to the EBCI’s Office of Budget and Finance Facebook page, the per capita allotments in 2020 were $5,859 in June and $4,899 in December. Both of those payments were down from 2019, with the December payment down by $2,315.

Under Indiana law, the LLC will only be able to give the tribe 25 percent of the annual revenue it receives from running Caesars Southern Indiana. However, Sneed, in previous council meetings, said the remaining LLC revenue would be used to help acquire or develop new commercial gaming ventures.

According to the Indiana Gaming Commission’s Fiscal Year 2020 Annual Report, Caesars Southern Indiana reported a total win of $171.7 million. That ranked third among the state’s 12 commercially licensed casinos.

In order to make up for the potential income hit the tribe expects, Sneed said EBCI will need to operate at least two more commercial casinos on par with Caesars Southern Indiana.

Sneed: Caesars Purchase Right for EBCI

A spokesperson for Sneed did not respond to a Casino.org message seeking comment. However, in a statement to the Smoky Mountain News, Sneed said his record as the tribe’s leader shows he has the best interests for its members. He remains confident in the commercial gaming venture.

“I am happy to speak with any tribal citizen that has concerns about this project, as I fully believe it is the best next step forward in the EBCI’s larger economic diversification plan to sustain tribal programs and services in years to come,” he said.

The EBCI Tribal Council was scheduled to meet on Thursday. However, because of a spike in COVID cases, the meeting has been pushed back a week.

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