Business and Economics

Committee Recommends Land-based Casinos, Live Dealers At “Racinos”

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October 31, 2014 — TheStatehouseFile.com

INDIANAPOLIS – Riverboat gambling operations would be allowed to rebuild on land and horse track casinos could use live dealers for table games under a recommendation approved Thursday by a legislative study committee.

But the proposal – approved unanimously – would not allow horse track casinos in Anderson and Shelbyville to add more table games to their operations for at least two years. Instead, it would only let them replace their digital dealers with people.

Rep. Terri Austin, D-Anderson, said the proposal is like requiring those casinos to operate with one hand tied behind their backs. “Their ability to be competitive and to sustain themselves is going to be based on the ability to change as market conditions change,” she said.

But Democratic Sen. Tim Lanane of Anderson called the recommendation “a very reasoned approach.”

The legislative package – which is meant to help all Indiana casinos battle out-of-state competition – will be considered during the 2015 legislative session, which begins in earnest in January.

Public Policy Study Committee Chairman Tom Dermody, R-LaPorte, said firmly that the legislative package does not represent an expansion of gambling. Supporters have been nuanced in their descriptions of their casino proposals as they seek to avoid a contentious debate with Gov. Mike Pence and conservative lawmakers, who oppose any gambling expansion.

The recommendations mean riverboats could only rebuild on adjacent land they already own or lease, not in new locations that might be more accessible – although the new casinos could be larger and have more gambling stations. And the track-based casinos would have to wait two years before asking the Indiana Gaming Commission to let them add more games.

Sen. Carlin Yoder, R-Middlebury, said the proposal to let horse track casinos “go from electronic to live dealers is common sense” but letting them add more table games would be a different issue. “If we’re going to allow them to just expand, we’ll run into a lot of trouble with the General Assembly,” Yoder said.

It’s not clear, though, how Pence would view the proposals. His press secretary, Kara Books, said it’s “premature for us to comment at this point in time.”

Still, Dermody said the proposals are meant to be “more than a Band-Aid.” He said the committee is seeking to give the casinos “some true reform they can run with so they’re not back here in another year” looking for additional help.

Indiana’s 13 casinos – 10 on water along the state’s borders and three on land in more central regions – have been wracked by competition from new gambling operations in Ohio, native American casinos in Michigan and additional wagering options in Illinois.

Now, the Pokagon Band of Potawatomi Indians is seeking federal approval to acquire land in South Bend to locate its own casino, one that would have no regulation by the state unless the tribe allowed it voluntarily.

Casino managers say they need help to survive and continue pumping some $400 million into the state’s coffers – tax revenue that has dropped by roughly one third in the past few years.

Mike Smith, president of the Casino Association of Indiana, called the legislative recommendations approved Thursday “a good start.”

“From an industry standpoint, it sure shows some movement,” Smith said. “We’re going in the right direction.

“The industry is facing some uphill climbs and like any other business they want us to be competitive and continue to be strong partners in Indiana’s economic development, providing good jobs and opportunities for the communities we serve and the state,” he said.

The recommendations include a proposal to replace the casino admissions tax – $3 at riverboat casinos and $4 at horse track casinos – with another gambling tax. That money now goes largely to local governments and problem gambling treatment programs and committee members said the tax needs to be replaced to ensure that funding continues.

“We’ll have a lot of grief if we don’t look at ways to replenish the local revenues,” said Sen. Jim Arnold, D-LaPorte. “I know the cities and towns and counties are going to be screaming and yelling.”

The committee also recommended tax incentives to encourage casinos to invest in new casinos, hotels or other improvements. But the group’s final report doesn’t specify how big the tax break would be or how it would be administered.

Lawmakers also proposed extending a tax break casinos currently receive for so-called “free play,” a marketing tool to lure gamblers by offering them vouchers for slot machines. The tax break is currently scheduled to expire next year.

The committee also recommended that the state do more financially to help support the French Lick Resort in Orange County, which includes a casino and two historic hotels. The gambling operation is among the smallest in the state and is expected to be hurt by land-based gambling along the Ohio River and live table games in Anderson and Shelbyville.

Dermody said the key is for the state to find other ways to assist the resort and surrounding community. But the committee report was not specific about how that could be done.

“This facility is a destination point that Indiana should be proud of,” Dermody said. “This cannot be swept aside… It’s more important than gambling.”

[Photo courtesy Horseshoe Casino, Hammond]

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