Indiana, Colorado casino owner Centaur misses interest payments, plans restructuring

Ind., Colo. casino owner misses lender payments

INDIANAPOLIS — The company that owns Indiana’s Hoosier Park casino and horse track and a Colorado casino, said that it didn’t make interest payments to senior lenders as scheduled this week.

Centaur LLC said Thursday that it’s working toward a companywide restructuring in an effort to reduce debt. Company officials said the restructuring may or may not include a bankruptcy filing, but that either way Hoosier Park in Anderson and Fortune Valley Hotel & Casino in Central City, Colo., will continue to operate as usual.

However, two of Centaur’s affiliates associated with a yet-to-be-built casino-and-racetrack project in western Pennsylvania have filed for Chapter 11 bankruptcy protection. Centaur said it will continue to pursue the Valley View Downs & Casino projects in Pennsylvania, and hopes the bankruptcy filings allow the application process with gaming officials there to continue.

Indianapolis-based Centaur said a companywide restructuring would put it in a better financial position going forward.

“Restructuring our corporate debt will place us in a position for long-term success and benefit our customers, employees, horsemen groups, host communities and other stakeholders,” Centaur Chairman Rod Ratcliff said in a statement. “We are confident our steps will ultimately strengthen the company.”

It’s unclear exactly how the company plans to restructure. Kurt Wilson, Centaur’s chief financial officer, said the company is currently in negotiations with its debtors to try and work out a voluntary agreement.

The company’s properties are healthy and generating enough cash to operate, Wilson said, but Centaur did not have the cash flow to cover interest payments to its lenders on Tuesday. He said the economy has taken its toll on the casinos, while high taxes in Indiana and a delay in the Pennsylvania project have diminished incoming revenues.

Hoosier Park officials have asked Indiana lawmakers to reduce its gambling taxes.

The General Assembly passed legislation in 2007 allowing the state’s two horse racing tracks 2,000 slot machines each if they paid a hefty licensing fee. Hoosier Park has already paid $250 million over two years to get the slot license — taking on massive debt to do so — and must continue to pay state taxes, including a graduated tax on revenue plus 15 percent of adjusted gross revenue to prop up horse racing purses.

Centaur officials said the $250 million slot machine fee is water under the bridge, but that the continuing high taxes should be lowered since Indiana’s riverboat casinos pay lower rates.

Even if Centaur ends up filing for bankruptcy protection, operations at casinos and race tracks would not change, employees would not notice a difference and taxes would continue to be collected, said Jim Brown, general manager of gaming at Hoosier Park.

“If we went through Chapter 11, we would remain open for business and we would continue to pay those taxes to the state,” Brown said.