Indianapolis Downs Cites State License Fee In Financial Woes
7:39 AM, Apr 7, 2011
The parent company of Indiana Live! Casino and the Indiana Downs racetrack announced Thursday it has filed for bankruptcy.Indianapolis Downs LLC, which operates both Shelbyville facilities, said it plans to reorganize under Chapter 11 protection.In a news release, Indianapolis Downs blamed its financial predicament on a $250 million state-mandated license fee and Indiana's "high statutory tax rate."The company said it "operates on a cash positive basis and generates enough revenue to pay its operating expenses," but that it has "a debt burden significantly greater than anticipated and beyond its ability to service under current terms.""Indiana Live! And Indiana Downs racino is an operationally profitable, but new, business that has not yet achieved its full potential," said Greg Rayburn, the company's chief restructuring officer. "This process will provide Indianapolis Downs with the time we need to enhance our enterprise value and the value of our secured lenders' collateral.'"The company plans to keep the casino and racetrack along Interstate 74 southeast of Indianapolis operational as it restructures."We aren't going anywhere. We'll continue to operate," CEO Fred Burford told 6News' Kara Kenney. "This facility generates significant tax dollars to the state. "The announcement was a shock to employees and Shelbyville residents."That's too bad. I hope it does better and picks up," said resident Teresa Cepican."I think it's really bad for the county," said slot attendant Dave Watkins. "It's a good place for money to come in."The race track opened in 2002, later adding the casino in 2009. It employs 1,300 people.Last year, Centaur LLC, which operates Hoosier Park casino and race track in Anderson, also filed for Chapter 11 bankruptcy. The company also cited the license fee as a primary reason for its financial woes.