Indiana lawmakers look to stem casino decline

Jan 21, 2013 10:10 AM

Indiana legislators have introduced bills to help the state’s riverboat casinos hold onto business in the face of growing competition from casinos in neighboring states.

The bills would allow the casinos to move from the boats onto land, reduce their taxes and lift game restrictions on some. A major question, however, is whether any can win approval from lawmakers leery about being perceived as expanding gambling.

Indiana expects a 15 percent drop in the tax revenues from its 13 casinos, from the $614 million it collected last year to about $520 million for the 2015 budget year. State officials blame the decline in part on the opening of new casinos in Ohio, Michigan and Illinois.

“Everyone is focusing on dollars but what we’re talking about at the end of the day are thousands of Hoosier jobs,” said Mike Smith, president of the Casino Association of Indiana. “Our industry for the last many, many years operated in a controlled competitive environment. Today, that’s no longer so much controlled with the expansion going on.”

A state Senate committee is scheduled to take up a bill Wednesday that would eliminate the riverboat admissions tax and replace it with an additional tax on casino revenues. It also would eliminate taxes on wagers made with credits given to gamblers by the casinos.

Sen. Phil Boots, R-Crawfordsville, the bill’s sponsor, said the changes are needed to keep Indiana’s casinos “in the game.”

“It’s going to be a hit to the state revenue, but if it makes them more competitive and we get more participation in the state then it should offset,” Boots said. “But if we don’t do it and they aren’t competitive, then we are going to lose continually to the surrounding areas.”

Smith said he didn’t know how much money the changes would save the casinos, and legislative staffers haven’t yet completed an estimate on the potential impact on state revenue.

Other provisions of Boots’ bill would allow the state’s 10 riverboat casinos — five on the Ohio River and five on Lake Michigan — to move to property next to their docks and drop a ban on live table games, such as blackjack and roulette, at the horse track casinos in Anderson and Shelbyville. Only electronic gambling machines are currently allowed at the tracks.

A bill from Sen. Ed Charbonneau, R-Valparaiso, would let Majestic Star casino in Gary move from its dock along Lake Michigan to a spot in the city, a change Gary leaders have sought for several years. They hope to boost business by putting the casino closer to a highway, but the move has been opposed by officials in neighboring Hammond and East Chicago, which have their own casinos.

Charbonneau’s bill would take away one of Majestic Star’s casino licenses for its two riverboats in exchange for the inland site. Charbonneau said moving the riverboats would open up a spot for a new Indiana shipping port along Lake Michigan that’s needed because of growth at the nearby Burns Harbor port.

“The only place with significant enough property happens to be where the Majestic Star boats are located,” he said.

The legislation got a cool reception from Rep. Bill Davis, R-Portland, chairman of the House Public Policy Committee, which would likely handle it. He expressed concern about moving casinos from locations endorsed by voters in local referendums.

He also said casino tax revenue doesn’t make up enough of the state budget — only about 4 percent this year — that the General Assembly has to make changes. However, he said, lawmakers do need to be mindful of the thousands of jobs the casinos provide.

“I think we’re going to do it in a way that we don’t see a huge expansion of gaming across our state in an effort to keep competitive and have gaming facilities where we haven’t seen them,” Davis said.

Charbonneau said action is needed because Indiana’s casinos are “under attack” and the prospects for the Lake Michigan casinos will only get worse if Illinois officials allow casinos in Chicago.

“We haven’t even felt any effect from Chicago,” he said. “We have our head in the sand if we don’t think that’s coming.”

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