Indiana Casinos Seek Legislative Relief

Indiana's casinos are fighting back against decreasing revenues and admissions caused by the 2008 recession and increased competition. For example, Indiana Grand will offer mobile gaming. Above all, casino operators want legislators to allow live table games, eliminate free-play tax and let riverboats move ashore. A major obstacle is Governor Mike Pence's anti-expansion philosophy.

The Indiana Gaming Commission recently approved a limited mobile gaming pilot program at Indiana Grand Racing & Casino, beginning next year. “Mobile gaming is relatively new to the gaming industry with only a handful of properties in the U.S. currently using the technology. The mobile gaming pilot program at Indiana Grand Racing & Casino would be the first of its kind in Indiana. With the executive director’s approval, appropriate mobile gaming rules, policies, and procedures will be created to govern the pilot program which could begin as early as the first fiscal quarter of 2015,” said Grant Scharton, communications director at Centaur Gaming which owns Hoosier Park and Indiana Grand racinos.

Patrons could play casino games on approved mobile gaming devices such as iPads and Android tablets within a defined and secure mobile gaming area, Scharton. “In total, up to 150 mobile gaming devices would be installed and operational within the defined space. The implementation of this new technology would not only satisfy a growing demand for new product offerings but improve the gaming experience by providing speed, comfort and convenience in a social gaming setting,” he added.

The move is an attempt by Indiana Grand, along with other Indiana casinos, to attract more customers as wagering and riverboat admission taxes continue to drop, mainly due to competition in other states. Prior to the 2008 recession, those revenues topped $900 million annually. In the budget year ended June 30, Indiana casinos brought in nearly $700 million for state and local governments.

The Indiana legislature’s Interim Public Policy Study Committee, chaired by state Rep. Tom Dermody,has been holding hearings to address the problems and listen to suggestions from casino industry experts. The proposals include deducting free play from the graduated wagering tax and allowing live table games.

Scharton noted casinos use free play as a promotional tool to attract customers. In Ohio, casinos do not pay taxes on free play money, so those casinos can be more aggressive in their advertising. “Competitively, deducting free play would put Indiana on a more level playing field with surrounding states while removing the disincentive currently imposed on Indiana operators as they aggressively compete for business. Although the financial impact is dependent on the final deduction amount, the overall benefits to the state would include increased property revenues, which would be subject to the graduated wagering tax.  Income tax and sales tax revenues should also increase as operators are able to offer additional incentives for both in and out-of-state customers to stay in Indiana or visit Indiana,” Scharton said. “We believe live table gaming would be a net benefit to Indiana and hope the Indiana legislature will take another look at the issue next session.”

Racino owners also want to be allowed to offer live table games, not just slot machines. Operators of riverboat casinos have pushed back against that idea, but racinos have argued the state would benefit from increased revenue and job creation. They note when Hoosier Park’s casino opened, 550 new jobs were created for local residents.

Riverboat casino operators also have asked to be allowed to move ashore.

Chairman Dermody noted several political obstacles will have to be overcome before lawmakers would approve any move that could be considered expanded gambling. One of those obstacles is Governor Mike Pence, who said as recently as this summer, “It is not my intention to pursue policies that reduce gaming in Indiana, but neither is it my policy to expand gaming in Indiana.”

Ed Feigenbaum, editor of Indiana Gaming Insight, noted, “Lawmakers would like to see a clearer definition of what Pence will accept or not and learn a bit more about why he feels that way philosophically, given the economics of the situation and the reality of the world facing the industry in Indiana and its 13,000 direct jobs. In the end, however, they may simply go their own way, and if there is sufficient support for change in the legislature, they may risk a veto and consider an override.”