In April, only Majestic Star I in Gary, Indiana had an increase in revenue, with .65 million compared to .55 million in April 2016, according to Indiana Gaming Commission figures. Ameristar took in .16 million versus .16 million in April 2016; Blue Chip Casino in Michigan City brought in .49 million compared with .02 million; Horseshoe Hammond took in .11 million compared with .62 million; and Majestic Star II took in .38 million versus .95 million.
Horseshoe Hammond Senior Vice President and General Manager Dan Nita said competition from video gaming machines in bars, truck stops and fraternal and veterans organizations in Illinois were the cause of declines. “There are two divergent stories. Table games have been quite stable and grown ever so slightly, but that can’t offset the decline in slot machines due to the video gaming machines,” he said. Horseshoe table were up 0.5 percent but slots declined 4.5 percent in April, Nita said.
However, all Indiana casino operators are celebrating House Bill 1350, which Governor Eric Holcomb signed into law on May 2. The measure will phase out an add-back tax over eight years and replace the admissions tax, which is charged every time a person enters a casino, with a supplemental wagering tax based on a percentage of gross gaming revenue.
Nita said casinos are the only Indiana businesses required to pay the add-back tax, which he called a tax on a tax. “We are encouraged that the state is supportive of a few measures that will enhance the competitiveness of our casino operations. They recognize that no other business in the state is required to pay income taxes on other state taxes, which, as we know, are quite significant,” Nita said. He added Indiana casinos are moving from the $3 per-person admissions to a supplemental wagering tax. “The net effect is neutral for the operator and the local jurisdictions in nearly all cases,” Nita said.
David Strow, a spokesman for Boyd Gaming, the parent company of Blue Chip Casino and Spa in Michigan City, said, “Boyd Gaming strongly supports House Bill 1350, which we see as a very positive step for Indiana’s gaming industry. It will provide our industry with stability from a tax perspective, and it will encourage additional re-investment in Indiana.”
Strow said in the past decade Blue Chip added a new hotel tower, an events center, restaurants and a spa. “These amenities have significantly increased our visitor traffic, and because of the way the admission tax is structured, our tax payments have gone up significantly as well,” he said. However, he noted, the supplemental wagering tax “will provide Blue Chip with much-needed stability from a tax perspective. And it should encourage other Indiana casino operators to continue re-investing in their properties. We operate in an extremely competitive regional gaming market, so anything Indiana can do to encourage re-investment will help ensure our future success.”
Troy Stremming, spokesman for Pinnacle Entertainment, parent company of Ameristar Casino East Chicago, said, “The modernization of the admission tax and the add-back tax were the most important to Ameristar.” He added, “The current add-back tax is unfair. We are paying taxes on gaming revenue twice. Indiana is the only state to have such a policy. We will see some cost savings from that change and could use it for marketing or property improvements.”
State Senator Karen Tallian voted against the bill, because “Both Michigan City and LaPorte will lose some distribution under the change,” she said. However, she agreed the add-back tax should be eliminated. “It is in fact a double tax,” she said.
