Indiana House Enrolled Act 1540 was designed “to stop the bleeding. I don’t think this guarantees anything long term,” said state Rep. Tom Dermody, the author of the bill that allows Indiana riverboats to move ashore and immediately receive up to million in tax-deductible free play to help battle competitors in Illinois, Ohio, Michigan and Kentucky. Governor Mike Pence let the measure become law without his signature.
The owners of Tropicana in Evansville and Majestic Star in Gary have said they will rebuild on land. But Dan Lee, chief executive of Nevada-based Full House Resorts, owner of the Rising Star Riverboat casino in Rising Sun near Cincinnati, said, “We’re scratching our heads, trying to figure out how to stay relevant.” Andre Hilliou, Full House’s previous chief executive officer, also lobbied for the right to move to land, but Lee said moving to land will not make a difference, even though ever since Horseshoe Cincinnati opened in March 2013, Rising Star, Hollywood Casino in Lawrenceburg and Belterra in Florence have felt the economic impact.
The bill also allows Hoosier Park in Anderson and Indiana Grand in Shelbyville to seek permission to replace electronic games with live dealers in 2021. Then the riverboats will have to compete with central Indiana’s two racinos for Indianapolis-area gamblers, losing their live-dealer advantage. Dermody said the six-year delay on racino table games was written based on feedback from riverboat owners, including Lee, who asked for time to adjust their business models.
Still, Lee said, “It was very odd public policy,” because although the bill doesn’t immediately allow live dealers, it boosts the value of the racinos and gives owner Centaur a chance to sell. Centaur Vice President and General Counsel John Keeler said that’s a possibility although Centaur paid $500 million for Indiana Grand slightly more than two years ago. Keeler added the competitive scene could be quite different in six years. More competition could arise in Illinois, Kentucky and Michigan, he said.
In addition, Centaur is concerned about the Pokagon Band of Potawatomi Indians’ plans to build a $48 million casino, a 500-room hotel and a tribal village on 166 acres the tribe owns in South Bend. The tribe has applied to the Bureau of Indian Affairs to take the land into trust. A tribal casino, with a hotel and tax-exempt gas, cigarettes and alcohol, could attract gamblers who drive to Hoosier Park from towns north of Anderson, Keeler said. The proposed Four Winds South Bend would be the first Indian casino in the state. The Pokagons own and operate three casinos in Michigan.
Legislators were nervous, too, so it includes language requiring the legislature to approve any Class III gaming compact with the tribe. It also spells out the management, administration and regulation of gaming, infrastructure and site improvements. Tribal Chairman John P. Warren said the bill will prevent the governor from negotiating in good faith and portions of it violate the Indian Gaming Regulatory Act. He added, “You have to realize, of 150 legislators, there’s a lot of gaming interests.”
Furthermore, Senate Concurrent Resolution 54 essentially asked the federal government to grant the state permission to deny the Pokagons a permit for a casino. The resolution’s author, state Senator Carlin Yoder said the Indian casino “has the potential to bring harm to the State of Indiana financially.” Last October, Arnold stated, “I don’t want to say, ‘The Indians are coming, the Indians are coming.’ But they’re coming. We have to be prepared.” And state Senator Jim Arnold, co-sponsor of Dermody’s bill, said he is “simply alerting” the state’s existing casinos that an Indian casino most likely would be taxed at a lower rate than they are.
In response, the Pokagons said SCR54 is “the latest example of the government of Indiana not understanding the Pokagon Band’s tribal sovereignty and the federal government’s trust responsibility to Indian nations. The tribe would prefer to move forward by working with state officials on the restoration of Pokagon lands in Indiana.”
But South Bend City Clerk John Voorde noted the South Bend Common Council voted to approve the potential casino. “The Pokagon’s multiuse project would create 2,000 jobs. The city wouldn’t turn that away,” he said. A BIA report estimated the Pokagon development would create 2,000 permanent and 1,470 construction jobs, with an economic impact of $620 million. Also, the report said a 3,000-slot casino would attract 4.2 million visitors annually with 87.3 percent coming from outside the county.
A final decision on the Pokagon’s land-trust application is expected from the U.S. Department of the Interior within 10-18 months, a tribal spokesman said.
