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February 15, 2013

Major Indiana casino overhaul faces doubts

INDIANAPOLIS — The leader of the Indiana House is hesitant about the chances of the Legislature approving a major overhaul of state casino regulations and taxes aimed at helping them against growing competition from surrounding states.

The state Senate is considering a bill that would allow Indiana’s 10 riverboat casinos to move inland to adjacent property and permit live table games at the two horse track casinos.

A version approved by the Senate Appropriations Committee on Thursday would also cut millions of dollars in casino taxes — and would reduce by some $40 million a year the amount counties with riverboat casinos would receive in tax revenue.

If the bill clears the Senate, it faces another possible makeover in the House.

Republican House Speaker Brian Bosma said he thinks allowing more inland casinos will “have a very rough time passing the House.”

“There may be some alteration in the tax structure, or items that are axed,” Bosma said. “I see that, I see that problem.”

Changes to the bill proposed by Appropriations Committee Chairman Luke Kenley, R-Noblesville, to reduce the state tax revenue losses include scaling back a 2002 agreement with the riverboat communities that capped how much state casino revenue they would receive but guaranteed them at least how much they received that year.

Kenley said that because casino activity has declined in the past decade it was time to end a deal that cost the state about $40 million last year.

He said he was asking those cities and counties “to just share in the fact that the activity isn’t there anymore.”

Officials from counties along the Ohio River and Lake Michigan with riverboat casinos plan on fighting cuts to the tax distribution.

In southeastern Indiana’s Ohio County, the Rising Star casino has given the community a huge boost since it opened in 1996, county Councilman Dillon Dorrell said.

“That money is extremely important,” Dorrell told The Indianapolis Star. “We were one of the early counties that got the riverboat. We had absolutely nothing. Now, we have spent the money wisely for capital improvements — and all these years into it, we need funding to maintain the services that the boat requires. That just doesn’t go away.”

Sen. Earline Rogers, D-Gary, said Gary stood to see a $5 million a year drop in revenue from the Majestic Star casinos and that the city needs the money to maintain services.

Rogers said legislators needed to remember that the riverboat communities are the ones that pushed for years to start the casinos that now generate some $600 million in annual tax revenue for the state.

“I don’t see why those dollars have to be taken from the individual communities where these boats are docked,” Rogers said.

The debate over casino changes comes as the state is already anticipating a 15 percent drop in casino tax collections during the coming years — from $614 million last year to about $520 million for the 2015 budget year. State officials blame the decline in part on the opening of new casinos in Ohio, Michigan and Illinois taking business away from the Indiana sites.

The House speaker, however, doesn’t seem poised to deal a much better hand to the casino operators.

“I don’t see this being the year to all of a sudden do an about-face on some of our standardized provisions for gaming, some of our regulation for gaming,” Bosma said. “Doesn’t mean we’re not hoping for some discussion. But this isn’t a watershed year for gaming expansion.”

 

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