EBIC deal with Caesars for Indiana casino to finalize

In Indiana, the Eastern Band of Cherokee Indians, through its EBCI Holdings, LLC (EBCI), is one step closer to owning its first casino outside of its Western North Carolina base after receiving approval for the purchase of Ceasars Southern Indiana this week.

EBCI agreed to purchase the casino’s operations from Caesars Entertainment Inc. (CZR:NASDAQ) for $250 million in late December 2020, with the sale subject to required regulatory approvals and certain other conditions. The latter having been satisfied, during a meeting Wednesday, the Indiana Gaming Control Commission approved the deal, which is reportedly expected to close in September, as reported by Louisville Courier Journal.

Vici lease arrangement:

In order to accommodate a $17.3 billion Eldorado Resorts Inc. (NASDAQ:ERI) buyout, Caesars Entertainment was required to agree on terms to sell the Harrison County casino by December 31, 2020. As part of the deal, a new lease with real estate investment trust VICI Properties Inc. (NYSE: VICI) will see EBIC pay an initial total annual rent of $32.5 million. The lease will reportedly have an initial term of 15 years with four 5-year tenant renewal options.

Once ownership has changed hands, EBCI will continue to use the Caesars brand while current employees of the Harrison County casino will reportedly “have the opportunity to retain their positions with the casino,” according to a source.

Former regional president for Caesars Entertainment, R. Scott Barber, who was named Chief Executive Officer for ECBI Holdings, said in an earlier statement…

“Caesars Southern Indiana is a beautiful facility with a well-established brand and a superb team of hundreds of local employees already in place. We want to keep the same friendly, fun, familiar environment for our guests.”

The CEO explained that they intend to “build on the facility’s success and offer guests additional opportunities to play at EBCI’s Harrah’s-branded North Carolina properties while also having access to all properties throughout the Caesars Rewards network.”

Formation of EBCI:

On May 12, 2021, the Eastern Band of Cherokee Indians announced the creation of EBCI and its management team and board for the purpose of diversifying the federally recognized tribe’s holdings in the commercial gaming and hospitality business as such opportunities throughout the U.S. and beyond are presented.

On dry land:

The former riverboat casino, Horseshoe Southern Indiana, operated on the Ohio River from 1998 until making a $90 million transformation to a land-based casino on December 12, 2019. The move to land was made possible by a 2015 Indiana law that permits riverboat casinos to build and operate brick-and-mortar operations on existing sites, something that was previously prohibited in the state.

Located just outside Louisville, Kentucky, the current 110,000 square foot facility is one of three gambling facilities the Eastern Band of Cherokee Indians is responsible for, including its two North Carolina casinos in Cherokee and Murphy. Caesars Entertainment has managed the two since opening.

Commenting on the Wednesday approval, Barber said, “we are delighted to move forward with Caesars and expand our already successful portfolio.”

“Not only is it a beautiful, recently renovated property, but Caesars is also a storied brand in the southern Indiana community,” Barber added. “We’re honored carry on that legacy as we continue to elevate Caesars’ world-class guest experience,” according to the Louisville Courrier Journal.