Indiana Legislative Committee Takes on Gambling Expansion, Full House To Consider Bill on Thursday



In Indiana, a far-reaching gambling bill will hit the House of Representatives on Thursday for a vote. Already heavily amended by the Ways and Means Committee, the bill now includes a 9.5 percent tax on sports betting revenue and provides a new casino license for the Terre Haute area.

In Indiana, a far-reaching gambling bill will hit the House of Representatives on Thursday for a vote. Already heavily amended by the Ways and Means Committee, the bill now includes a 9.5 percent tax on sports betting revenue and provides a new casino license for the Terre Haute area.

The updated Senate Bill 552 was backed by a 17-to-6 vote on Tuesday, and as legislators initially approved the brand-new tax on adjusted gross receipts, it leads the way for sports wagering on likely both professional and college athletics.

Rep. Peggy Mayfield (R-60) told Casino.org it will be up to casinos, racinos or any new sports betting operation whether to apply for a license in the Hoosier State, and “some casinos may choose to not even do it” given the low margins.

The sports betting license alone will cost $100,000, and the state’s total cut is projected to be $12 million a year.
The committee also approved requiring 3.3 percent of the sports wagering cut to go for problem gambling services.

Also, the committee excluded adding any mobile or online sports betting to the land-based option.

More Competition
The committee additionally approved allowing for a brand-new casino license in Vigo County— mostly likely in Terre Haute — though it still will need to be approved by a local vote.

Mayfield said the Terre Haute casino licensing process is “much more of a competitive bid.”

Previously, any gaming venue in that region required reassigning one of two licenses now used for a casino in Gary’s Buffington Harbor.  Other operators would have had to bid against current venue owner Spectacle Entertainment.

Now, Spectacle could keep both casinos at the harbor, or relocate one to a land-based location, which would require the company to pay a $50 million fee to the state — down from $100 million — and forfeit the second license.
The new version of the bill also allows Spectacle to have as many as 2,764 gaming seats in the possible Gary brick-and-mortar venue, located near a highway exit. It combined the number of seats they are allowed under two licenses and merged them in one large casino, officials explained.

In theory, Spectacle even could keep its two water-based casinos and bid on the proposed new license for Terre Haute.

A local committee will solicit proposals for casinos in the Terre Haute area and identify the best three. Each of the finalists then bids, with the minimum set at $25 million.

Currently, there are 11 Indiana commercial casinos either on land or water. There are also two racinos — which will now be able to have live dealers under the current bill.

Indiana Tax Rates Changed
The legislators additionally adjusted tax rates charged on adjusted gross receipts (AGR). When it comes to distressed riverboats, which are those that earn $75 million or less in AGR, on the initial $25 million, the tax rate will be reduced from 5 percent to 2.5 percent.

For those casinos that make over $75 million, on the initial $25 million, the tax rate will be lowered from 15 to 10 percent. These new rates, if approved, will take effect on July 1, 2021.

The bill also removed an earlier cap of two licenses per operator.

House members may choose to further amend the bill before voting. The Senate already approved a version of the bill but because the two are different — the legislation will likely be sent back to the Senate for a second vote and/or a conference committee to iron out differences between the two versions.

One lingering concern is having one large casino with in Gary that could crush the competition. Some other casino operators may find it unfair, sources said.

We have allowed more consolidation in the industry than I expected,” Rep. Ed Delaney (D-86) a retired attorney, told Casino.org.

State Says What’s Ours Is Ours
Rep. Mayfield also expects there may be attempts by legislators to approve mobile sports wagering and possibly some other last-minute changes such as allowing sports betting at veterans’ halls.

“I still think it’s going to get tweaked,” she said.

She points out that Indiana had a “stable” and “predictable” gaming industry, and “we didn’t want to upset that much.”

When it comes to the licenses, some legislators contend they belong to the state, such as the one that Spectacle may be forced to forfeit.

“It’s our license, we don’t need to buy it back,” Delaney said.
Gary Mayor Karen Freeman-Wilson — a Democrat who is the state’s former attorney general — told Casino.org she was “pleased … the bill is advancing through the House. While we look forward to new casino development on the Borman Expressway, we are focused on the opportunity to develop an [transportation and shipping] facility at Buffington Harbor thanks to the vacating of that area by the casino.”

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