HomePublicationsNewsletter ArchiveNewslettersVolume 20Issue 28Indiana Legislature Considers Changes to Casino Law

On Thursday, September 26, 2014, the Indiana General Assembly’s Interim Study Committee on Public Policy (“Committee”) held its first of three hearings to discuss potential changes to the state’s gaming laws. As stated by Committee Chairperson Rep. Tom Dermody, the purpose of the hearings is “to take a look at the gaming industry from a 20,000 foot level…to lay out what we can do and truly think outside the box” to reform the state’s gaming industry.

Indiana first authorized gaming in 1988 when voters approved a lottery referendum that resulted in the creation of the Hoosier Lottery. In 1993, the legislature passed the Indiana Riverboat Gaming Act which authorized riverboat gaming in the state, which was followed by legislation allowing for slot machine operations at horse racing tracks in 2007.

During the hearing, legislative research representatives noted that Indiana’s gaming industry has experienced difficulties in recent years due to increased competition from neighboring states and burdensome legal and regulatory requirements. This overview noted that the competitive landscape has dramatically changed over the 25 years since casino gaming was first authorized, as competition in Michigan, Illinois, and Ohio has significantly increased over this period.

Following the legislative research overview, members of the state’s gaming industry were asked to present issues and suggestions for potential changes in law or policy that would benefit the industry. Mr. Mike Smith, President of the Casino Association of Indiana, provided a broad overview of the economic state of the national gaming industry, noting that there has been a general downturn across the country. Speaking on Indiana, Mr. Smith noted that the “days of the industry supporting 6% of the state’s budget are probably over,” but expressed optimism that the hearings would result in a long term plan that would allow the industry to adapt to the changed market.

In addition to other changes, representatives from the state’s gaming properties noted three primary areas where legislative changes would assist industry growth. First, properties noted that the tax on promotional play has put Indiana locations at a competitive disadvantage to properties in neighboring states that allow for tax deductions for free play. Second, the requirement that each property pay an admissions tax based upon the number of people visiting the gaming facility does not fit within the modern view of casinos as free-flowing “entertainment centers” with a mix of gaming and non-gaming amenities where patrons may enter and exit the gaming floor multiple times during a single visit. Finally, operators stated that the riverboat model has impacted  their ability to create modern “entertainment center” casino floor plans, require significant maintenance expenditures, and are generally inflexible and make adapting to competition difficult. Further, operators noted that capital expenditures for marine equipment could be better allocated towards improved facilities and are largely unnecessary due to the authorization of dockside gaming. Because of this, some operators have expressed a desire that the legislature remove the riverboat requirement and allow for land-based casinos.

Though the Committee will discuss potential solutions to these issues at its next hearing, scheduled for October 8, members did indicate that legislative changes are likely to be necessary to ensure the continued success of the industry. Sen. James Arnold noted that “we need to do what we can to maintain these facilities…so that they can continue to thrive and be good corporate citizens.”

The Committee stated that the members will discuss potential solutions to the issues raised at its October 8 hearing, followed by further discussion on October 23. For more information on the hearings, please visit the Indiana General Assembly’s website at: http://iga.in.gov/   

 

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