Indiana state Rep. Todd Huston recently introduced House Bill 1350 which would allow the state’s 10 riverboats and one land-based casino to stop charging visitors a admission fee. However, the bill also would subject casinos to a supplemental wagering tax of 2.8 percent of adjusted gross revenue. The original bill proposed 3 percent tax. In addition, the updated legislation would delay the change, lowering the supplemental payment to million in 2020 and then million every year after that. Huston said this would give local governments more time to prepare for the revenue decrease. Currently local governments in Northwest Indiana receive million in annual casino tax revenue.
The bill also would remove a $3 admissions tax on each person who enters the casino floor. Huston said the current admission tax is outdated and shifting to a tax on adjusted gross revenue actually would generate more money by attracting more gamblers, and encouraging casinos to invest in their properties and market to Chicago. He said the bill “is still a work in progress,” but emphasized, “We have to recognize that we’re not the only game in town anymore.” Casino officials agreed that the change would give them incentives to offer more dining and entertainment options without fear of being taxed for every person who crosses the casino floor but does not gamble.
Huston noted several communities would not lose much money from this change. For instance, Tropicana Evansville currently pays taxes equivalent to 2.7 percent of its income. The House Public Policy committee voted 9-1 to send the legislation to the full House for consideration.
In the Senate, the Public Policy Committee approved state Senator John Ford’s measure, Senate Bill 354, allowing Full House Resorts, owners of Rising Star Casino in Southeast Indiana, to open a satellite location in Terre Haute. Full House Resorts Senior Vice President Alex Stoylar said, “We’re looking to invest in Indiana, not neighboring states. It’s going to give about $10 million a year to the city of Terre Haute, in addition to the jobs it’s going to create. Terre Haute allows us to attract a lot more from Illinois, which is really the key to all of this.”
Ford recently amended the bill to require Full House to pay in perpetuity” $3 million annually to the Indiana Department of Revenue for maintenance of the historic West Baden Springs hotel. The original bill limited the payments to five years.
Another amendment Ford introduced would require Las Vegas-based Full House to pay local governments in Madison and Shelby counties more than $500,000 per year and $900,000 annually to the Indiana Horse Racing Commission. The payments would cover projected losses in gaming revenues and taxes at Hoosier Park racino in Anderson and the Indiana Grand racino in Shelbyville. The payments would continue until those facilities are allowed to hire live dealers in 2021.
Stoylar agreed to the amendments in Ford’s bill. He said Full House is working with other gaming operators to make sure the industry remains competitive despite competition from nearby states as well as a planned Native American casino in South Bend. He added Full House earlier agreed to sell some of its state-authorized “free play” credits to Centaur Gaming, operators of the Anderson and Shelbyville facilities.
Besides the racinos, a new Terre Haute casino likely would cannibalize business from French Lick Resort Casino and Tropicana Evansville; they would not receive additional money from Full House. “According to the fiscal, it’s very minimal, the impact to the Evansville area. Plus Tropicana is moving inland, which should increase their revenue,” Ford said.
Tropicana General Manager John Chaszar said, “It would definitely affect our business in Evansville. We just made a substantial investment into the community. Any loss of revenue not only impacts the revenue of the casino, but it also affects the revenue of the city. It’s 22 years since gaming was legalized and really, eventually, we’ll have to take a look at all the regulations and how we become more competitive with our neighboring states in this industry.” Evansville is located two hours south of Terre Haute.
Terre Haute Mayor Duke Bennett told legislators, “I’ve had a lot of response from people who are supportive of this and a lot of them aren’t even gamblers. They just think, ‘Why not here? Why not have that available as another amenity, another destination to help increase tourism in Terre Haute?'” He added Terre Haute has lost a lot of its manufacturing base and although its economy has diversified, a casino would “give us a new opportunity to provide a different source of economic impact” that would avoid tax breaks requested by other prospective businesses.
Southwest Indiana Chamber of Commerce Director of Governmental Relations Justin Groenert was the only voice of opposition. He also pointed out Tropicana’s $50 million investment in a new land-based casino in Evansville. “This is legislation that positively impacts one casino and one community and negatively impacts others in the state. With so many unknowns in the Indiana gaming industry right now, it seems more ideal to work with industry-wide issues versus one-off requests like this.”
The changes are being made to deal with the gambling industry’s decline in revenue. According to the Casino Association of Indiana, statewide gross gambling revenue from September 2015 to 2016 was 21 percent below its peak in 2007.
Committee Chairman Ron Alting said members will “digest” the testimony before voting on the bill. “This is an enormous policy. There have to be a lot of people involved in it, including perhaps even the entire caucus of the Indiana Senate to see if they want something like this to move or not move,” Alting said.
Meanwhile, the group Casino-free Terre Haute met to oppose the proposed casino. Organizer T. J. Hellman said, “What are the true social and economic costs over the next 5, 10, 15 years of having the casino in our community? We don’t know that we haven’t had the chance to look at that really as a group.”
National Director for Stop Predatory Gambling, Les Bernal, attended the group’s recent forum. He stated, “This is a micro level but these are the decisions facing our country. Do we create a economy based on real prosperity or do we create an economy based on milking and extracting existing wealth like a casino would do to this town of Terre Haute?”
