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At least one Indiana casino owner wants to be able to move slot machines and gaming tables to population centers, such as Indianapolis, as out-of-state competition cuts into business.(Photo: IndyStar 2006 file photo)Buy Photo

Full House Resorts CEO Dan Lee — whose plan to build a casino on former airport land was rejected last year — hasn't given up on Indianapolis.

The outspoken Las Vegas casino executive is gearing up to take his case for gaming in Indiana population centers to the legislature at a time when some lawmakers are showing sympathy for more flexible gaming rules. Some observers say his effort could help pave the way for someone to shuffle the gambling landscape in the state.

But so far, Lee's brash style isn't winning over many, if any, of the people who might be able to help him. And he has incited stiff opposition from competitors in the gambling business.

Full House is the owner of Rising Star Casino Resort in Rising Sun. Lee, who took over as chief executive in December 2014, argues that Rising Star is overshadowed by new competition in Cincinnati. He wants the state to let him move some of Rising Star's games to a more profitable area.

Lee last year chose a stunningly ambitious target: Indianapolis. He proposed moving 1,400 of Rising Star's approved slots and table games to a new casino as part of a redevelopment of a 130-acre site that includes a former Indianapolis International Airport terminal. The pitch gained no traction, but Lee said if it can't be Indianapolis, the state should still let Full House and other operators bring gaming to the state's more populous cities.

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Full House Resorts, the owner of Rising Star Casino Resort in Rising Sun, wants to move some of the casino's gaming capacity to another location in the state. (Photo: Charlie Nye/IndyStar 2013 file photo)

"The state has found itself in an unusual position where a lot of its gaming capacity is in the wrong places," Lee said in an interview. "When it was legalized some 25 years ago in Indiana, it was done at all the border communities, designed to bring in revenue from Ohio and Illinois and Michigan and Kentucky, to some extent. All of those places have their own casinos."

Lee said he will ask the legislature for help. Although Gov. Mike Pence has said he won't sign any bill that expands gambling, the legislature has taken small steps toward offering more freedom to casino operators.

The General Assembly last year passed a bill allowing riverboat casinos — which for decades were the only types of casinos allowed in Indiana — to move onto land and let race

Rep. Todd Huston, R-Fishers, has proposed legislation that would remove restrictions on where casinos could be built and how many could be licensed. Huston thinks the state eventually could be open to allowing casinos to move their games — but not to Indianapolis, at least any time soon.

"That could be potentially open for discussion," Huston said. "But I think the difference is, everybody understands the economic impact and, frankly, the commodity that Indianapolis would be. If there's going to be gaming in Indianapolis, it would need to be thought of in a large-scale economic development plan. Where's the right spot to put it in? What are the right types of businesses to be around it? How do you attract the right interest?"

Lee's bid to build a casino as part of a larger development by the airport was never likely to win support, Huston said. The Indianapolis Airport Authority passed over Lee's proposal in favor of a plan from a group called Athlete's Business Network. The airport authority eventually rejected that proposal, too, and is restarting its development process. Lee hasn't given up on developing the site and eventually adding a casino.

"It may work if it's in a different community," Huston said of moving gaming from one casino to a new site.

Full House Resorts CEO Dan Lee wants Indiana to let casino operators to move excess gaming capacity to new sites. (Photo: Full House Resorts)

So far, though, Lee has made little effort to meet with key decision makers in the state, including top lawmakers and the governor's office, said Sen. Ron Alting, R-Lafayette. Alting chairs the Senate Public Policy Committee, which oversees gaming issues. Despite Lee's Indianapolis proposal and continued call for expanded gaming, Alting said Lee has yet to discuss the idea with officials who have the power to bring it to fruition.

"You're going nowhere without those people's support, so why put the time and energy forward to go to the airport without knowing whether it's something truly feasible?" Alting said. "That would have been the proper way to have done this, because the fact is that it would be the General Assembly that would issue that license and approve them. It was in my opinion not a very good business move."

Lee countered that he has met with several local and state officials.

"We met with people on the City Council, people who represent the area — we met with people we knew were opposed," Lee said.

Yet, Lee in an earnings call earlier this month acknowledged that pitching a casino in Indianapolis was a confrontational move. Lee mocked one of his competitors, Centaur Inc., and suggested that lawmakers are opposing him on Centaur's behalf. Centaur owns two racinos, Hoosier Park in Anderson and Indiana Grand in Shelbyville, that could lose business if a casino opened in Indianapolis.

"We were sticking it in their eye a little bit to propose to put a casino at the airport," Lee said, "but we were in fact just responding to the (request for proposals) put out by the airport authority for developing a piece of land. So we said, you know, we’d put a big development there with a casino on it. And of course Centaur just about crapped in their pants."

Centaur executives in an interview noted that the company acquired its race

"Unequivocally, we would oppose the relocation of Rising Star machines to anywhere, whether it be Indianapolis or Connersville," Keeler said. "That is not part of our regulatory scheme. If you were to permit Rising Star to do that, how would you stop Majestic Star (in Gary) from doing it, or how would you stop Centaur from doing it?"

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Rising Star Casino Resort revenue increased 10.2 percent to $12.2 million during the first quarter, owner Full House Resorts reported. Full House has said the casino is struggling because of competition in Cincinnati. (Photo: Charlie Nye/IndyStar 2013 file photo)

Although Lee in the past has said Rising Star is barely breaking even because of increased competition, Full House this month reported that revenue at the casino was up 10.2 percent to $12.2 million during the first quarter from the same period a year ago. The company's overall performance also has been getting stronger.

Centaur President Jim Brown said that proves Lee can improve his business in Rising Sun without expanding to other locations.

"Even though we've heard optimistic investor calls by Full House, I guess that's not good enough right now, so (Lee wants) to change the rules of the game," Brown said.

Lee in his May call with investors and analysts blamed Centaur's lobbying efforts for stifling his potential in Indiana. Lee said a Centaur executive told him he didn't have a "tinker's chance in hell" of getting approval to build a casino in Indianapolis.

"Then I started meeting with legislators, and I must have had six or seven of them tell me we didn’t have a tinker’s chance in hell of getting this through the legislature," Lee said in the earnings call. "And I finally turned to our lobbyist, I said, 'Is that like an Indiana term?' He’s like, 'What do you mean?' I said, 'Tinker’s chance in hell. I mean, I don’t even know where it comes from, but everybody keeps using exactly the same term.'

"It just tells me that their lobbyists were meeting with all the state legislators before we met with them and telling them to tell me that we didn’t have a tinker’s chance in hell."

Lawmakers, including Alting, bristled at Lee's claim that they are acting on Centaur's behalf.

"I'm without words of understanding the philosophy behind (Lee's comments) and particularly throwing jabs at people in the General Assembly that he's probably going to need very badly to get what he needs done," Alting said.

Ed Feigenbaum, the editor of the Indiana Gaming Insight newsletter, said Lee's recent comments are fairly typical to his approach.

"Dan Lee is a guy that they're used to hearing over-the-top rhetoric from," Feigenbaum said.

Full House, the smallest of the state's casino operators, might not get what it wants. But, Feigenbaum said, Lee's willingness to make a public argument for change could help push the needle on Indiana's slow-moving gaming laws.

"Full House may be paving the way for a bigger, stronger company," Feigenbaum said.

In the meantime, Lee is telling investors that he sees greater opportunity in Indiana — if the legislature is willing to help create it.

"We always knew that this would probably be a discussion for the 2017 legislature," Lee said in his May earnings call. "We're trying to figure out exactly what to go to the legislature with now — and now is the time to think about it — and go in and say, 'Look, just let us relocate these and maybe propose a few places we could relocate.' "

Call IndyStar reporter James Briggs at (317) 444-6307. Follow him on Twitter: @JamesEBriggs.

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