Sunday, October 06, 2002

Casino closes under penalty

Belterra shuts down at 6 p.m. today

By Robert Anglen
The Cincinnati Enquirer

        Belterra Casino will close at 6 p.m. today and won't open again until noon Wednesday as part of the harshest penalty ever imposed by the Indiana Gaming Commission following allegations the casino supplied prostitutes to high rollers at a golf outing last year.

        But the impact of a 2 1/2-day closure will hardly be felt outside the Ohio River casino, since all employees will be paid and state and local taxes will be calculated as if the riverboat remained open and didn't lose any business.

        “Sometimes you have to wait a stretch to cross the street. I guess we won't have that,” Switzerland County auditor J.C. Ramsey said. “They won't have workers going to work. Nobody will be going to gamble. The upshot is that the time down will likely cost them more than $1 million.”

        While the casino - near Vevay, Ind. - will be closed, Belterra's hotel, golf course and restaurants will remain open. That isn't enough, however, to keep some of its regular bus tours from arranging stops at two other Ohio River casinos on Monday and Tuesday.

        “The bus groups which normally go there called us and we said they could come here,” said Larry Buck, general manager of the Grand Victoria casino in Rising Sun, Ind. “We are going to be prepared for a little bit of an increase in business.”

        Mr. Buck said there will be about 15 extra employees in the casino and that he expects to see more customers in restaurants and bars.

        “It's nothing in the category of extraordinary,” he said. “We share customers the way a good restaurant shares the same customers.”

        Since Belterra opened in 2000, it has competed for customers with Grand Victoria and the Argosy in Lawrenceburg, both of which are closer to Cincinnati. Last year, the casino brought in about $10 million for Switzerland County.

        “They have done a lot for this county,” Mr. Ramsey said, ticking of a list of grants and donations to the towns of Vevay and Patriot. “I look at (the fine) two ways: It is going on at other places no worse than it is here. But this brought it to a head.”

        Belterra - flagship of California-based Pinnacle Entertainment Inc., which owns seven resort casinos from Louisiana to Nevada to Argentina - paid a $2.26 million fine to the state in August as part of a settlement agreement over the prostitution complaints.

        The settlement also requires Belterra to build a new hotel tower within two years or forfeit a $5 million escrow account to the state.

        Belterra General Manager Alain Uboldi did not return repeated calls. But for the three-month quarter ending June 30, the company reported a net loss of $6.4 million, or 25 cents a share, due largely to a one-time charge of $6.5 million to cover settlement expenses.

        Jenny Arnold, spokeswoman for the Indiana Gaming Commission, said the Belterra fine is the harshest penalty ever handed down by the commission, which oversees the state's $1.8 billion casino industry.

        “The commission has handed down fines before. But none have resulted in this type of penalty,” she said, adding that the casino is responsible for paying all employee wages, including tips. “The commission made it clear that if (casino officials) err, they need to err on the side of employees.”

        The Belterra investigation was prompted by two female employees who filed a sexual harassment lawsuit claiming that eight to 12 prostitutes were brought from California and Louisville to entertain 48 men. Gwen Perry and Logananne Sabline, both of Madison, Ind., claimed in their suit that the women at the golf outing “groped and fondled the male guests, and allowed the male guests to grope and fondle them.”

        The women claim that they were told by the casino's security chief to entice men into the casino. After complaining, the women said they were harassed, with Ms. Sabline getting fired and Ms. Perry demoted. They are seeking $600,000 each in damages.

        In its investigation of the prostitution claims, the gaming commission also found that the former general manager violated policy by issuing chips and tokens to the golf participants and by awarding them prizes out of the cash cage.

        Cincinnati lawyer Ned Dorsey, who represents the two women, said he is pleased with the fine and the action taken against Belterra. But he said he remains stymied in his attempts to get the commission to turn over its investigation reports.

        “They view the matter as settled and done,” he said of the commission. “My clients were the victims of the original situation. (The commissioners) haven't done anything to provide them with any kind of (help). They could say to Belterra, "you need to negotiate in good faith and get this resolved.' But we still have court remedies.”

        A settlement hearing is scheduled at the end of October.


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