Indiana Governor Eric Holcomb recently signed House Bill 1350 which will phase out an add-back tax over eight years and switch from the per person casino admissions head-tax to a supplemental wagering tax based on a percentage of gross gaming revenues.
Regarding the add-back tax, which casino operators said is a tax on a tax, Horseshoe Hammond Casino Senior Vice President and General Manager Dan Nita stated, “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.”
David Strow, a spokesman for Boyd Gaming, the parent company of Blue Chip Casino and Spa in Michigan City, the admissions tax, charged every time a person enters the casino, impacted hit Blue Chip especially hard after it made several improvements. “We’ve added a new hotel tower, an events center, a spa and several new restaurants. 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,” Strow said.
He added transitioning to a 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.”
Pinnacle Entertainment spokesman Troy Stremming, a spokesman for Pinnacle Entertainment, owner of Ameristar Casino in East Chicago, said the change in the admissions tax is revenue neutral for the casino, but the processes associated with counting guests were a strain. “The modernization of the admission tax and the add-back tax were the most important to Ameristar,” he said.
State Senator Linda Lawson supported the bill after Hammond Mayor Thomas McDermott Jr. assured her it would not affect the city. “Our local agreement with Horseshoe is better than what some other communities have,” Lawson said. State Senator Karen Tallian voted against the bill because, she said, “Both Michigan City and LaPorte will lose some distribution under the change.”
Still, despite the expected tax-change boost, Indiana casinos near Illinois continue to experience drops in slot machine revenue. Horseshoe Casino’s Nita said competition from video gaming machines in Illinois bars, truck stops and other locations are to blame for the 4.5 percent drop in slots revenue last month. Table games, however rose 0.5 percent.
“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,” Nita said.
Only Majestic Star I in Gary posted an increase in revenue with $8.65 million compared to $8.55 million in April 2016 according to Indiana Gaming Commission figures. Ameristar took in $18.16 million last month compared with $21.16 million in April 2016; Blue Chip Casino in Michigan City brought in $13.49 million compared with $14.02 million; Horseshoe Hammond took in $35.11 million compared with $36.62 million; and Majestic Star II posted $5.38 million compared with $5.95 million.
