Officials from Indiana’s 11 riverboat casinos and two land-based racinos recently met with lawmakers from the Interim Study Committee on Public Policy to discuss ways to stop the decline in gaming tax revenue decline and save 13,000 casino jobs. Prior to the recession, gaming tax revenues regularly exceeded 0 million annually, but have dropped to 4.8 million for state and local governments in the 2014 budget year, which ended June 30. Casino officials said the declines are due to more competition in neighboring states, particularly tribal casinos in Michigan, and possibly soon in South Bend, that pay minimal or no gaming taxes. The panel will consider the requests as it prepares possible recommendations for the legislative session that starts in January.
The gaming officials asked legislators to consider reducing the state’s progressive wagering tax rate, which increases from 15 to 40 percent as a casino makes more money over a year. They also requested that lawmakers eliminate the $3 per-person admission tax paid for every visitor, even non-gamblers.
In addition, casino operators asked legislators to consider eliminating wagering tax on table games. And, they strongly urged lawmakers to expand the “free play” deduction. Enacted two years ago, this deduction exempts casinos from having to pay taxes on up to $5 million a year in complementary funds used to attract players. Ryan Soultz of Boyd Gaming, owners of the Blue Chip Casino in Michigan City, said, “Free play is a good start but it’s not nearly enough. You have to take a look at the whole tax structure to create a better sandbox.”
Several casino representatives urged legislators to consider allowing land-based casinos, as recommended in state Senator Earline Rogers’ bills that have failed in the Republican-controlled General Assembly on several occasions. Officials from the riverboats Majestic Star in Gary, the Tropicana in Evansville and the Rising Star near Cincinnati all expressed a desire to move to new buildings on land adjacent to their riverboats.
Peter Liguori, chief executive officer at Majestic Star, said it costs $50 million annually to operate a casino on a riverboat, which rarely moves but must be marine-worthy. Liguori said the benefits of a land-based casino include closer proximity to the hotel and parking garage, greater flexibility and efficiencies and the opportunity to use Buffington Harbor for other development. He noted no taxpayer money would be required for the casino to move to land.
However, officials from East Chicago’s Ameristar and other riverboat operations said allowing land-based casinos would upset the current competitive balance, which already is stressed from new casinos and video gambling in bars and restaurants in neighboring states.
Jim Brown, president and chief operating officer at Centaur, owners of Hoosier Park and Indiana Grand, also asked legislators for free-play tax deductions. He noted Ohio casinos are not taxed on their free-play giveaways. In addition, Brown asked for live table games instead of electronic blackjack and poker, and economic incentives to make more capital improvements. “This incentive would increase property taxes, create new construction jobs and create new permanent jobs. It would also increase regional tourism,” Brown said.
State Rep. Tom Dermody, study committee chairman, noted, “Now our decision in the next meeting is going to be what do we think is best for the future of gaming for the state of Indiana. And while I don’t think we’ll ever get back to the revenues we once had, we need to look at all these issues to see what might work as a whole.”
State Sen. Jim Arnold said given the tax revenues, charitable donations and jobs that are at stake, it is critical that lawmakers get this issue right. “If something were to happen and these facilities were to close, we would see a devastating effect that I don’t think we’d recover from in my lifetime,” Arnold said.
