Indiana Governor Mike Pence has made it clear to legislators he is against any expansion of gambling in the state. So at a recent hearing of the legislature’s gambling study committee, Indiana House Public Policy Committee Chairman Tom Dermody told colleagues that prior to the 2015 session, they need to determine exactly what expansion means. “I believe the goal has to be to recommend something leading into session and be able to justify why it is not an expansion of gaming,” Dermody said.
Pence isn’t making the task easy for lawmakers by refusing to precisely spell out what expansion means to him, although recently he said, “I’m going to make it very clear to legislators that our administration will not support any expansion of gaming in the state of Indiana. I think we ought to be building our economy on our traditional areas of strength: manufacturing, agriculture, life sciences and logistics,” he said.
As gaming revenues have declined due to increasing competition in neighboring states, Indiana 13 riverboat casinos have asked to be allowed to move their operations onto land, and the state’s two racetracks with slots want to add live table games. Legislators would like to help give the casino industry a hand without doing anything that could be interpreted as expanding gaming.
The Majestic Star riverboat casino in Gary could offer a way for that to happen. State Rep. Earline Rogers explained to gaming study committee members in the early 1990s, Gary was awarded two gaming licenses so at least one of its riverboat casinos, then separately operated by Majestic Star and Donald Trump, always would be available for boarding. In 2002 legislators determined the riverboats did not have to sail, and in 2005 Majestic Star acquired Trump.
Today Majestic Star still operates on two gaming licenses; each boat is considered a separate entity, allowing Majestic Star to split gaming revenue and pay a lower wagering tax rate than similar-sized competitors with a single license, such as East Chicago’s Ameristar Casino.
Majestic Star Chief Executive Officer Peter Liguori told committee members if the two casinos are allowed to relocate under one land-based roof, the two-license tax benefits must continue or else the Majestic Star could not succeed. He explained each side of the land-based casino would operate on separate licenses.
However, in 2007 when two Indiana horseracing tracks were allowed to open casinos, each paid the state $250 million for a gaming license. As a result, although the legislature would have to approve Gary’s second license being transferred or sold to another Indiana city, Majestic Star could end up the loser if it demands payment for giving up the license.
But if Majestic Star relinquishes one of its licenses, Pence and the Republican-controlled legislature might be willing to allow casino admission-tax changes, land-based gaming and live table games the industry wants. That way they could claim they reduced gaming in the state, even though Indiana still would have the same number of casinos.
The gaming study committee is expected to present its recommendations to the full general assembly on October 30.
