After two years of fighting for gaming expansion in the Indiana legislature, 2023 may be the year to approve iGaming.
Among the issues to be addressed in a new bill are problem gambling and how to tax online gaming. It is expected that the legislation will originate in the House of Representatives and be carried by Rep. Ethan Manning.
Tax rates being discussed are from 18 percent to 19 percent and earmarking up to 3.5 percent of tax revenues to fight problem gambling, according to industry expert Ed Fiegenbaum.
Manning told Capital Chronicle, “At this time, it’s too early to speculate on the form any proposed legislation might take, but I will continue to have conversations with other members and stakeholders as we move forward.” Manning led the legalization effort last year, but House Bill 1356 died in the Public Policy Committee. What’s different this year is that Manning is the head of that committee.
The state legalized online sportsbooks in 2019 but left unaddressed non-sports internet gaming, including casinos and lotteries, which would bring online gaming to anyone with a smartphone or other device that can support apps.
Two years ago the Hoosier Lottery negotiated with IGT Indiana to offer online lottery games, according to the Fort Wayne Journal Gazette. However, once some legislators found out about this they approved House Bill 1260 that prevented the lottery from adding online games.
Another booster of the iGaming legalization is the Indiana Gaming Association, whose President and CEO Matt Bell commented, “The industry has rebounded off of the pandemic and responded well, but the competitive threats that are on the horizon are very real and very significant.”
Bell called for the legislature to help the gaming business keep up with technology and that without it, the state’s casinos could “absolutely anticipate a hole in our budget” as profits hemorrhage to other markets.
The state has 12 casinos that brought in $2.5 billion in the 2021-2022 fiscal year and paid $700 million to the state. Spectrum Gaming Group, which conducted a report on iGaming for the Gaming Commission, estimates that online gaming could generate nearly $2 billion in its first three years. That would translate into $190 million in state taxes if an 18 percent taxation rate is assumed.
Because iGaming takes less investment for buildings and employees, it has less impact on employment and collateral industries that serve brick-and-mortar casinos. Spectrum cautioned that a lower tax rate for internet games would hurt physical casinos.
Problem gambling activists add the warning that an activity that is so easy that you can do it anywhere with a phone has a built in hazard and costs to society. Moreover, the people who tend to gravitate towards online gaming are younger, more likely to bet higher amounts and more likely to build up large debts as a result.
Although support for an online gaming bill is strong in the House, Senate President Pro Tempore Rodric Bray told the Gazette that the Senate was unlikely to move on the bill this session. The senator cited several reasons, including “the significant expansion of our gaming laws over the last four years, the fact that he doesn’t have constituents coming to him requesting iGaming, and that Indiana already ranks fourth in the nation for casino revenue.”
