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January 19, 2019

To Spend Or Not To Spend?
A credit rating service has downgraded its credit rating for Indiana Live Casino and warned that the casino might face a bankruptcy filing because of its debt load. Moody's Investor Service doesn't expect Indiana Live to earn enough revenue to meet its interest obligations for 2010 which is a warning sign that it could follow Hoosier Park into bankruptcy. Indiana Live! reportedly lost $50 million during the 2009 fiscal year.

Last month, Centaur LLC, the Indianapolis-based owner of Hoosier Park horse track and casino in Anderson, filed for Chapter 11 bankruptcy reorganization. The company said its casino and racing operations would continue during the reorganization period.

In October 2009, Centaur missed a $13.4 million payment due on $400 million in outstanding debt, putting the company in default with its lenders. The bankruptcy filing did not disclose the exact amount of the company's debt troubles. Centaur estimated both assets and liabilities in the same broad range of $500 million to $1 billion.

The Indiana General Assembly approved the installation of slot machines at both Indiana horse tracks in 2007 for which each track paid a $250 million license fee. Centaur borrowed heavily to pay the license fee and to finance remodeling at the track. However the company claimed that the financial difficulties were not a result of the license fee, however, it complained that Indiana's ongoing gambling taxes are the primary cause, coupled with a stubborn economic downturn.

Owners of both Indiana Live! and Hoosier Park continually grumble about the taxes they are required to pay. They claim more than 47 percent of their gambling revenue goes toward taxes while Indiana's riverboats only have a 35 percent tax rate, even though most of the tax rate disparity goes to subsidize the state's horse racing industry.

Locally, this comes at a time when the city and county are anxiously and aggressively developing plans on how they intend to spend their respective shares of up to $8 million in annual windfall revenue from Indiana Live!

Some say the current financial situation at the racinos is another good reason why local officials need to curtail their spending plans and sit on the racino revenue for a few years while they reconsider how best to use the money in new ways that will benefit the entire community.

Any thoughts?

Reader Comments

Posted: Thursday, April 15, 2010
Article comment by: Makes no cents at all

I just saw SPD pull over a car on interstate 74. It doesn't matter if it had been at the Indiana Live or not,"they" will say that it had and that it was a drunk driver. Next week Shelbyville will have 6 new officers and they can race each other all over town like all the rest do now. Does any one know how a citizen's arrest works?

Posted: Wednesday, April 14, 2010
Article comment by: Submissive

Looks like Turner got what he wanted. Five new cops for four DUIs a month. Seems like money well spent to me!

Posted: Wednesday, April 7, 2010
Article comment by: Sarge

There are so many needs in this community and the money that is coming in NOW could help immediately.

This "economic development" idea is something that gambles in many ways - including the obvious gamble that the casino tax money will continue to pour in.

Local politicians: use the money NOW to improve the community in TANGIBLE ways and drop all of this economic development baloney!

Posted: Tuesday, April 6, 2010
Article comment by: BFD

This sounds very frightening! And Sgt Turner keeps pushing for more cops to work out there. The city should sit back and work on plan B because it sounds like we may need it.

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