The Indiana House Public Policy Committee voted unanimously 12-0 to send Senate Bill 552, a comprehensive gambling bill sponsored by state Senators Mark Messmer and Jon Ford, on to the Ways and Means Committee—with some significant changes.
One of those changes would disallow mobile and online sports betting, permitting sports wagering only at casino-based sports books. State Rep. Ben Smaltz, chair of the Public Policy Committee who offered the amendment, stated he had concerns mobile sports betting would “have the tentacles of gaming coming to all our communities.” Opponents of this change said it would give the unregulated betting market a major win in Indiana.
Another change regarding sports betting removed a provision requiring the state’s casinos to use official major sports league data for in-game wagering. The data mandate was promoted the Indianapolis Colts but lawmakers felt it wasn’t a favorable regulation for Indiana sports betting.
Another amendment, also offered by Smaltz, would require Spectacle Gaming LLC, led by Terre Haute businessman Greg Gibson and Rod Ratcliff, former chief executive officer of Centaur Gaming, the new owners of the Majestic Star casinos in Gary, to pay a license fee of $100 million to move one of the casinos off Lake Michigan to a land-based location. The second Majestic Star license would move to Terre Haute in Vigo County–preferred by Spectacle—but be open to a competitive bidding process. A provision proposing a referendum by Vigo County voters on the 2019 general election ballot was removed.
Gary officials support moving one of the casinos to downtown Gary since they want to develop a multimodal transportation hub at Buffington Harbor, Majestic Star’s current location. But some committee members said the license fee was too high. State Rep. Vanessa Summers said, “To me it sounds like an address change. It doesn’t necessarily sound like something that they should have to pay $100 million to do. Even for a rich person $100 million is kind of in the stratosphere.”
Gary representative B.R. Lane stated that fee “might have a chilling effect” on attracting to and keeping businesses in Indiana. Spectacle lobbyist John Keeler noted the company already paid for the existing gaming licenses and SB 552 would require it to pay again plus lose a license to Vigo County which would go up for bid.
Smaltz responded that gaming licenses are the property of the state, so if the location changes, a new license fee should be assessed. “We do hope the license fee will be more reasonable, more business friendly. It is a tremendous risk. One is the investment of $300 million in Gary to build the new casino and the other is the potential competition from a Chicago casino.”
State Rep. Sean Eberhart agreed with Smaltz that operators take a risk—but said as a result, the fee should be eliminated completely. “To me, I think it should be a zero fee to move. I think it’s fair compensation. They’re taking a risk” by investing millions to relocate the casino, he said.
At an earlier hearing, officials at Penn National Gaming, owner of the Ameristar Casino East Chicago, said a downtown Gary casino definitely would take customers from Ameristar. They added they don’t believe sports betting legalization would be enough to offset their concerns. Phil Taillon, chief of staff to Mayor Thomas McDermott Jr. of Hammond, site of Caesars’ Horseshoe Hammond, warned allowing the Gary casino move would destabilize the regional gaming market and possibly discourage national casino operators from investing in Indiana in the future. “We do not believe that relocating one of the Gary licenses to the 80-94 expressway increases the pie. It just changes the size of the pieces between each casino property and each local community,” Taillon said.
Messmer and Ford’s bill originally included a “hold harmless” provision, requiring Gary to share with Hammond, East Chicago, Michigan City and LaPorte County any excess gaming tax revenue for three years following Majestic Star’s move ashore. Gary Mayor Karen Freeman-Wilson said she supported that provision because the city is “not attempting to improve Gary’s fortunes on the backs of our neighbors.” But Amendment 60 removed from SB 552 that provisions and others regarding compensating other casino regions for loss of business.
The legislation also would move up the timeline to July, instead of 2021, for allowing live dealers, not just electronic games, at the racinos in Shelbyville and Anderson. Eberhart said, “The only reason Indiana Grand and Hoosier Park don’t have live table games now is because of Governor Mike Pence and his threat to veto the entire gaming bill in 2015.” Harrah’s officials, owners of the Anderson and Shelbyville racinos, said live dealers will create 650 jobs and additional investment in the facilities.
Another change, introduced by state Rep. Edward Clere, would allow veterans and fraternal organizations to offer sports betting as a way to raise money for the philanthropic causes the organizations support. Clere said since the bill already would legalize sports betting, a version benefiting charities also should be approved. “I thought it would be an appropriate time to add this new opportunity so that they could conduct spots brackets or pool surrounded events,” he said.
Now SB 552—called a “once-in-a-generation opportunity” by Messmer–is another step closer to a full House vote. If it passes there, the Senate, which passed the measure last month, would need to sign off on the amendments. The legislative session will end April 29.
