In a settlement agreement announced Monday, the Indiana Gaming Commission has fined casino and racetrack executive R.D. Hubbard $750,000 and his company, Pinnacle Entertainment of Glendale, $2.25 million in reaction to a golf tournament last year at which high-rollers were entertained by at least eight imported women who have been labeled prostitutes.
At a meeting in Indianapolis, the commission also ordered that the Pinnacle-owned Belterra Casino, near Cincinnati, be closed for gaming for a 66-hour period in early October.
Hubbard, former chairman of Hollywood Park Race Track before it was sold to Churchill Downs, resigned as chairman of Pinnacle in April and in recent months has sold about $7 million worth of his stock in the gaming company.
The commission also cited Hubbard for "pressuring" casino employees to issue gambling chips to the golfers without proper documentation.
A gaming commission spokeswoman said that the vote on the sanctions against Pinnacle was 4-1, with one voting "present." The vote on the penalties against Hubbard was not available.
Asked to comment, Theodore Nicholas, one of Hubbard's attorneys said: "I prefer not to say anything now, because I have not fully discussed this with my client."
Nicholas was one of two attorneys representing Hubbard at Monday's meeting.
Daniel Lee, who took over as chief executive at Pinnacle when Paul Alanis resigned in April, could not be reached for comment.
The fine against Pinnacle was said to be a record penalty for the Indiana Gaming Commission, which oversees 10 riverboats in the state. The commission was alerted to the hiring of the prostitutes after two former Belterra employees filed sexual-harassment lawsuits against the casino. The sexual-harassment suits are not directly related to the golf tournament.
Hubbard, 67, breeds and races thoroughbreds and quarter horses and owns Ruidoso Downs, a quarter horse track in New Mexico. He has applied for a license to build and run a racetrack-casino in Hobbs, N.M. There are two other applicants, and a decision on the license is expected in late August.
Pinnacle, formed after Churchill Downs bought out Hollywood Park in 1999, owns casinos in the U.S. and Argentina and has two card clubs in California, one on a lease arrangement with Churchill at Hollywood Park and the other in Compton.
The Indiana commission said that one of the reasons for the hefty fine was that "neither Pinnacle nor Belterra reported in a timely fashion to the commission the fact that the golf classic and surrounding events had transpired." The commission reported that on successive nights two entertainers, Howie Mandel and Waylon Jennings, had their performances interrupted at Belterra because of the noise coming from a nearby room where the golfers were being entertained. The commission also said the women were flown to Indiana on a private airplane leased by Pinnacle.