Indiana committee approves land-based casinos

The panel declared land-based gaming on adjacent property already owned or leased by the casinos will make them more competitive with new land-based casinos in neighboring states. It also endorsed tax incentives for casinos to build new facilities or rehabilitate existing gaming centers.

"We have a situation where the casinos are struggling and we can either sit back and do nothing and watch them continue to decline, or try to help them, just like we would any other industry, become more competitive," said state Representative Tom Dermody, the committee chairman.

Dermody said land-based gaming on the casinos' existing footprints is not the "expansion" of gaming feared by Republican Gov. Mike Pence, since the casinos would be limited in their new buildings to the number of slot machines and table game positions they had July 1.

Nevertheless, Dermody said convincing the governor of that fact, along with majorities in the Republican-controlled House and Senate, will take a significant effort during the 2015 legislative session.

The bipartisan study committee's recommendation for land-based casinos is just a recommendation. Any proposal changing state law to allow land-based gaming still must traverse an always rocky and uncertain road through the Statehouse starting in January.

Lawmakers got an early taste of fights to come when state Sen. Earline Rogers strongly objected to a proposed study committee recommendation - later deleted - that a land-based Gary casino be forced to operate on a single gaming license.

Local issues loom large

The Majestic Star currently is considered two casinos for tax and regulatory purposes, a remnant of an earlier era when the gaming boats were separately owned and one was available for boarding while the other sailed Lake Michigan.

Majestic Star CEO Peter Liguori has told lawmakers that without the tax benefits provided by the two licenses it will be "impossible" for Majestic Star to move to the US$ 95 million- to US$ 135-million land-based facility it wants to build near its existing hotel.

Dermody said the Gary casino already stands to gain a competitive advantage since it likely will be the only Northwest Indiana casino to immediately move on land. So it's reasonable, he said, to look at whether Majestic Star deserves continued relief from Indiana's progressive wagering tax, or if the second license should be surrendered. "Between now and January, the Majestic Star has to do a job of proving why they need two licenses when every other facility works off one license," Dermody said.

Rogers said the state taking away the second license could cut the city's gaming revenue in half. It also would upend decades of state policy favoring Gary in gaming as a reward for Gary being the first Indiana city to seek casinos.

The panel's other recommendations included continuing the US$ 5 million a year "free play" tax deduction through 2018, instead of 2016, exempting the casinos from paying wagering tax on promotional play coupons sent to frequent visitors.

It also called for replacing the US$ 3 per person casino admissions tax with an unspecified alternative revenue source, permitting live dealers at the two central Indiana horse track casinos and better promoting the casino at the French Lick Resort.

State Senator Jim Arnold said the General Assembly needs to enact these changes not only to make Indiana's casinos more competitive with Illinois, Michigan and Ohio, but also a tribal casino likely to open near South Bend in the next few years that can offer bigger prizes and better player rewards since it won't be subject to Indiana gaming taxes. "I don't want to say, 'The Indians are coming, the Indians are coming.' But they're coming," Arnold said. "We have to be prepared."