Indiana legislators recently filed competing bills that would legalize and regulate iGaming, setting up a scenario similar to 2021 when neither bill got very far. State Rep. Doug Gutwein filed HB 1356, co-authored by state Rep. Ethan Manning. For the second consecutive year, state Rep. Alan Morrison filed HB 1337.
Both bills would take effect July 1 and both would tax adjusted gross receipts from iGaming at 18 percent, double the state’s current 9.5 percent rate on sports wagering. In comparison, neighboring Michigan taxes online casino gaming AGR at 20 percent to 28 percent.
Both bills have been assigned to the Committee on Public Policy. Previously, Governor Eric Holcomb said he first wanted to see an expansion of the state’s brick-and-mortar casinos, one of the main reasons Morrison’s bill didn’t pass out of committee last year.
The Hard Rock Northern Indiana opened in May, adding to the strong casino presence in Northwest Indiana that attracts revenue and tax dollars from nearby Chicago. However, the struggle continues over opening a casino in Vigo County, part of Morrison’s 38th district. The Indiana Gaming Commission earlier rejected Lucy Luck’s license renewal and in November gave it to Churchill Downs Inc., which didn’t formally receive the license until earlier this month.
HB 1356, Gutwein and Manning’s bill includes iGaming licenses to be issued to casinos and the state’s two racetracks, plus revenue sharing for casino-host cities and counties to make up for some of the revenue brick-and-mortar casinos could lose from iGaming competition.
The bill names the IGC to regulate iGaming and, besides allocating funds to host cities and counties, it directs gaming tax revenue to the state’s General Fund, with some funds directed to problem gaming.
Fiscal estimates of tax revenue indicate iGaming would generate between $15.3 million to $30.5 million in fiscal year 2023 and reach between $46.2 million and $92.4 million by fiscal year 2025. In addition, it estimates tax revenue from brick-and-mortar casinos would range between $12.2 million to $24 million in FY 2023 and reach $37.1 million to $72.9 million in FY 2025. License fees of $7.3 million to $7.8 million would help mitigate the projected tax revenue loss in the first year. Overall, the bill projects additional revenue from $10.3 million to $14.1 million in FY 2023; $6.7 million to $13.5 million in FY 2024; and $9.7 million to $19.9 million in 2025.
HB 1337, Morrison’s bill, included a fiscal note in the 2021 filing, including first-year licensing fee revenue estimates identical to HB 1356. Both bills project an additional $6.7 million to $13.5 million of tax revenue in FY 2024; in FY 2025, Morrison’s bill projected tax revenue between $8.7 million and $17.5 million, with iGaming generating between $34.3 million and $68.6 million in tax revenue versus $46.4 million to $92.8 million projected by Gutwein and Manning.
Morrison’s bill also includes expanding the IGC from its current seven members to nine, keeping the governor’s appointment of seven but also allowing the House speaker and Senate president pro tempore to each name another commissioner. Morrison previously expressed frustration over the IGC’s denial of Lucy Luck’s license renewal and was one of seven state representatives who signed a letter in August objecting to certain IGC casino integrity rules.
