The Indiana Gaming Commission confirmed Friday that it is postponing approval of a new Indiana casino while it investigates allegations that top executives at former Indianapolis racino business Centaur Gaming were involved in directing illegal campaign contributions to an Indiana congressional candidate in 2015.
The commission confirmed to IBJ on Friday morning that it believes Centaur, which formerly was based in Indianapolis and managed the state’s two horse-track racing casinos in Anderson and Shelbyville, is connected to a federal investigation into a scheme to funnel corporate contributions to political candidates that became public Thursday.
The commission said it was postponing a meeting scheduled for Feb. 7 to consider awarding a casino license in Vigo County to Spectacle Gaming, which is led by former Centaur executives Rod Ratcliff and John Keeler. Spectacle’s executives have been active lobbyists in the Indiana Legislature for many years, and Republican Gov. Eric Holcomb faced a state ethics review last year of his dealings with Ratcliff. The Indiana inspector general ultimately cleared Holcomb.
The investigation involves Strategic Campaign Group, which is in hot water for a illegal scheme to funnel corporate contributions to political candidates.
Republican strategist Chip O’Neil, who worked as vice president for the Strategic Campaign Group, pleaded guilty to conspiracy in federal court in Virginia on Thursday and admitted to helping collect donations from small donors in the names of candidates who never received the money.
O’Neil said in court that at least eight people, including his girlfriend, were used as conduits for illegal corporate donations to a U.S. House candidate in Indiana. Court documents also do not reveal the candidate, but Federal Election Commission records indicate the recipient of the illegal funds was former Republican state Sen. Brent Waltz, who unsuccessfully ran for Indiana’s 9th Congressional District in 2016.
Court records implicate an unnamed Indianapolis gaming company and its vice president and general counsel as part of the scheme. The Gaming Commission told IBJ on Friday it understands that company is Centaur Gaming.
Keeler, who was vice president and general counsel for Centaur, did not respond to IBJ’s request for comment.
Federal investigators said the Indianapolis gaming company gave $38,500 to the Strategic Campaign Group team through a fake contract for political work. That money was then funneled to Waltz through various conduits, according to prosecutors.
The Justice Department said O’Neil and his co-conspirators made the transfers “to evade the restrictions of corporate contributions to campaigns, to evade the limits placed on money that individuals could contribute to a campaign, and to disguise the fact that the gaming corporation was the true source of the funds.”
Centaur Gaming was based in Indianapolis and operated the state’s two horse-track racing casinos in Anderson and Shelbyville until 2018, when Las Vegas-based Caesars Entertainment Corp. acquired the properties.
Later in 2018, Centaur executives created Spectacle Entertainment and acquired Majestic Star Casino and Majestic Star Casino II in Gary.
Ratcliff, former chairman and CEO of Centaur Gaming, became the chairman and CEO of Spectacle, and Keeler was named the general counsel for Spectacle.
Spectacle executives successfully lobbied lawmakers last year to allow the company to close the riverboat casinos in Gary and construct a new casino at a more high-profile interstate location in Gary.
The legislation passed by the Indiana General Assembly in 2019 also allowed for a new casino in Terre Haute to open and gave authority to the Gaming Commission to accept proposals for it and select an operator.
The only applicant for the Terre Haute license was Spectacle. The Gaming Commission had been expected to grant Spectacle the license for the Terre Haute casino at its postponed Feb. 7 meeting.
“The information we received is concerning and the Commission has begun a review pursuant to its statutory responsibilities into this matter,” Gaming Commission spokesperson Jennifer Reske said in an email to IBJ.
Reske said they are also working to determine the impact the investigation will have on the new casino in Gary, which is already under construction.
Majestic Star and Majestic Star II will continue normal operations for now, Reske said.
The federal investigation that Centaur and its executives are allegedly connected to is part of the Justice Department’s initiative to crack down on “scam PACs” that extract money from donors by promising falsely to spend it on political campaigns.
O’Neil is cooperating with authorities in the investigation, which could net future charges.
Strategic Campaign Group President Kelley Rogers was already sentenced last week to three years in prison for fraud and associate Scott Mackenzie is awaiting sentencing.
In a text to IBJ on Thursday night, Waltz said he “was interviewed as part of an investigation of Mr. Kelly Rogers approximately 18 months ago. Mr. Rogers was a consultant for the campaign in the summer of 2015. I have answered every question asked of me by investigators.
“To the best of my knowledge all campaign contributions from my 2016 congressional campaign were legal. I will cooperate with any investigation.”
The Washington Post and The Associated Press contributed to this report.