Rod Ratcliff, Former Indiana Gaming Exec, Has License Suspended by State Regulators

Rod Ratcliff, Former Indiana Gaming Exec, Has License Suspended by State Regulators

The Indiana Gaming Commission on Wednesday took severe action against one of the founding fathers of the state’s gaming industry when it suspended Rod Ratcliff’s license and also ordered him to surrender his ownership stake in Spectacle Entertainment.

Rod Ratcliff
Rod Ratcliff
Indiana Gaming Commission Chairman Michael McMains listens to testimony during Wednesday’s commission meeting to discuss the Spectacle Entertainment investigation. The IGC voted to suspend former Spectacle leader Rod Ratcliff’s license in a unanimous vote. (Image: Indiana Gaming Commission)

The IGC also ordered former Spectacle executive John Keeler to sell his stake in the company by Jan. 15. Both men have been associated with a federal investigation into illegal campaign contributions, with Keeler having been indicted in September.

Keeler, who did not participate in the meeting and refused to take part in an interview with the IGC, had his license suspended at the time of his indictment. He also took leave from the company at that time, but Spectacle terminated his position earlier this month.

Meanwhile, the investigation into the Indianapolis-based owners of the Majestic Star Casino in Gary that started in January continues. It also threatens the company’s plans to open a $300 million land-based casino with Hard Rock International in the northwest Indiana city in the near future.

IGC Executive Director Sara Gonso Tait laid that out clearly as the 100-minute meeting concluded.

A couple of weeks ago, staff communicated to the relevant parties that given the uncertainty surrounding all of these matters – and like I said I almost feel more uncertain today, which I didn’t think was possible – that staff would not be diverting resources from the current docked riverboat to the land-based facility in an effort to protect the state’s interests and to protect the workers of Majestic Star Casino,” she said.

While the IGC’s review started with the company’s connections to the federal case, staff also discovered other issues that led to the actions against Ratcliff on Wednesday. Among the other issues the IGC discovered in its investigation to Ratcliff were his failure to update key documents as well as his failure to report transfers of Spectacle shares.

IGC Claims Ratcliff Involved in Campaign Scheme

Ratcliff, who resigned quietly as Spectacle’s CEO and chairman in June, founded the company in 2018 after his Centaur Gaming company sold Hoosier Park and Indiana Grand to Caesars Entertainment. Prior to that, he helped usher in both horse racing and casino gaming by being a part of the groups to open Hoosier Park, the state’s first racetrack, in 1994 and Argosy Casino in 1996, a year after the first casino opened in the state.

It was Centaur that was tied to the federal investigation as authorities claim executives met with a campaign consultant for an Indiana Congressional candidate in 2015. A plan was devised where the consultant would secure contributions for the campaign and Centaur would then give the consultant money to pay back those individuals.

The scheme, prosecutors allege, included Centaur sending invoices to the consultant for bogus work.

While Ratcliff has not been indicted in the case, the IGC said in its order against him that thanks to “information and belief obtained independently” Ratcliff was an unnamed executive mentioned in Keeler’s indictment who met with the consultant to devise the plan.

The candidate, former state Sen. Brent Waltz, was indicated in the case.

After Ratcliff stepped down as Spectacle’s leader, he maintained his ownership stake in the company and worked in an investor relations role. The IGC also stated he could no longer be involved in the management of the Majestic Star’s casino operations.

However, IGC General Counsel Greg Small told the commissioners Wednesday that even after he was terminated from his investor relations position on Dec. 3, it was discovered that he will still exerting control over the company.

Ratcliff Refuses Interview Requests

Ratcliff did not appear at the meeting, although he was represented by two attorneys. Prior to the commissioners taking action against their client, the attorneys tried to resolve the matter by getting them to approve a plan that would have allowed Ratcliff to sell his stake to Terre Haute businessman Greg Gibson, who co-founded Spectacle with him.

However, those talks broke down after IGC Chairman Michael McMains said the commission would consider it if Ratcliff then permanently surrendered his license.

In addition, Hard Rock representatives objected to the proposal because they said Gibson would purchase Ratcliff’s shares through a promissory note.

“Mr. Ratcliff in fact would remain a significant stakeholder in the project. In fact, he would become its largest individual creditor potentially,” said Lorne Cantor, a Jones Day attorney representing the Florida-based gaming company.

In June, the IGC asked Ratcliff to come in for an interview for the investigation. On June 16, a day before that was to take place, an attorney contacted the agency and said he would not attend. The following day, the IGC received a letter apologizing for the late cancellation. It noted Ratcliff would make himself available upon request.

The IGC took Ratcliff up on the offer on Nov. 30, requesting an interview on Dec. 10 regarding potential violations of the Indiana Riverboat Gambling Act. Again, the day before that, Ratcliff’s attorney notified the commission that he would not sit for an interview.

Small told the commissioners it’s believed to be the first time a Level One license holder has refused to appear for an IGC interview, and McMains said he found Ratcliff’s decisions to be “troubling.”

The IGC also requested interviews with three of Ratcliff’s associates. All three refused, with two claiming their Fifth Amendment right against self-incrimination.

“While the constitutional right to avoid self-incrimination can be claimed, the Commission may draw an adverse inference from an individual’s refusal to testify before the Commission,” the IGC stated in the order.

Spectacle Equity Transfers Not Reported

Spectacle officials who have cooperated with the investigation reported to the IGC last month that an audit uncovered Ratcliff had transferred an unspecified number of Class A shares in the company to Keeler, Rich Zeigler, and Matt Whetstone. IGC regulations stipulate that license holders must inform the commission when such transfers take place.

The IGC order does not indicate when those transactions occurred.

According to his LinkedIn page, Zeigler is a former Centaur employee who joined Spectacle in March 2019 as vice president of development. Prior to that, he served as a consultant for nearly eight months and worked with Spectacle officials on site selection for the land-based casino in Gary. Zeigler states he “identified a preferred location and secured purchase agreements for the selected location.”

Whetstone, identified by the Times of Northwest Indiana as a former state representative, currently serves as principal of 1816 Inc., a lobbying firm. He also serves as a county commissioner in Hendricks County, an Indianapolis suburb, and on the board of the Indianapolis Airport Authority.

According to his biography on the 1816 website, Whetstone “currently works in-house with 1816 LLC’s client, Spectacle Entertainment Group as executive vice president. He assists the CEO in the strategic direction of the organization and helping maintain relationships with key business, investment, and government leaders.”

In addition, the IGC said Ratcliff also made an equity transfer of 3,000 Class B shares in August 2019 and neither he nor the company informed the commission on that transaction either.

The commission also noted that Ratcliff signed a “settlement and release agreement” in late February, a month after the investigation started. However, the company did not notify the IGC of it until nearly eight months later. That deal included a monetary settlement and a grant of an unspecified amount of Class B shares.

Ratcliff a “Self-Made Man”

In a brief opening statement, Dan Webb, one of Ratcliff’s lawyers, called him a “self-made man” who despite not earning a college degree worked his way into a successful career in the gaming industry. He also stated that he was not charged in any of the federal investigations, nor had he been alleged previously in any cases.

Despite that, Webb said Ratcliff was willing to walk away from gaming if the commission approved the deal with Gibson. He also indicated that Ratcliff’s Spectacle shares have been placed in trust.

“Based on these developments, there is no longer any emergency suspension basis under Indiana law to suspend his license,” Webb said. “There is no possible emergency. His shares are completely gone from his control.”

However, McMains cited Ratcliff’s refusal to cooperate for interviews as a reason to move forward with the suspension.

We’ve had a lot of experiences with Mr. Ratcliff, good experiences, and that’s why I was hopeful that we could resolve this with a voluntary surrender and not force us to make a decision on an emergency basis,” he said.

Commissioners unanimously agreed to approve both measures against Ratcliff.

Ratcliff’s suspension is technically effective for up to 90 days, but it can be renewed. In addition, Small said that after the 90 days, commissioners could contemplate revoking his license.

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