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November 26, 2014

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Newest Indiana casino failing to meet minority business goals

INDIANAPOLIS -- Casino regulators are growing impatient with operators of the state's newest riverboat casino for failing to meet statutory goals in contracting with vendors owned by minorities.

"If they don't comply, they will pay the piper," Donald Vowels, chairman of the Indiana Gaming Commission, said Tuesday of Belterra Casino Resort along the Ohio River in Switzerland County. It's between Louisville, Ky., and Cincinnati and is owned by Pinnacle Entertainment Inc. of Glendale, Calif.

John Spina, vice president and general manager of the casino complex, said later that Belterra has "worked very hard" toward meeting the goals. He reserved further comment, saying he first planned to discuss the matter in greater detail with commission staff later this week.

Meanwhile, an aide to Gov. Frank O'Bannon said a state commission to promote minority business development hoped to work more closely with the Gaming Commission in ensuring business opportunities with casinos.

"The governor thinks this is a very, very important part of doing business with the state of Indiana," said Addison Simpson.

State casino law sets goals of 10 percent for spending with minority-owned companies and 5 percent with those owned by women.

Not all of the casino companies are precisely meeting those goals, but the statewide average in 2000 was 12.19 percent for minority-owned companies and 5.25 percent for those owned by women.

Belterra opened near Vevay -- about halfway between Madison and Lawrenceburg in far southeastern Indiana -- in October 2000. But of the $176 million it made in qualified purchases for goods and services that year, only 4.8 percent went to minority businesses and less than 1 percent went to women-owned companies.

According to preliminary figures for the first quarter of 2001, Belterra's numbers had improved to 5.38 percent and 8.74 percent, respectively. The statewide averages were 20 percent and 8.29 percent.

Thar said some of the casinos in southern Indiana have faced a greater challenge in meeting the goals than the casinos on Lake Michigan, since the minority populations in some southern counties is less than 2 percent.

He said the commission in the past has been somewhat accepting of companies not meeting the goals as long as it could see good faith efforts were being made.

In 1999, Caesars Indiana was criticized for having the worst record among the state's nine riverboats in operation the year before in awarding contracts to companies owned by minorities and women.

But Caesars contracted with a minority-owned company based in Columbus, Ohio, to build a $50 million, 10-story hotel west of its Glory of Rome riverboat in Harrison County, which helped boost its percentages.

Of Caesars' nearly $27 million in qualifying purchases in the first quarter of this year, just over $14 million -- or 52.3 percent -- went to minority-owned businesses. Another $1.85 million, or 6.89 percent -- went to women-owned companies.

Commission member Ann Bochnowski said regulators could impose fines on companies that don't meet the goals, "but that doesn't solve the problem."

"We have made our position clear time and time again," she said. "This is not a negotiable item."

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