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State gambling revenue expected to stay flat

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Indiana’s share of tax money generated by the state’s 13 casinos is expected to remain relatively flat for at least the next few years, a state fiscal analyst told Gaming Study Committee members this morning.

The committee, consisting of eight state legislators and the executive director of the Indiana Gaming Commission, is meeting today to consider state gaming issues, including changes at Indiana’s two horse tracks with casinos.

Jim Landers, fiscal analyst for the committee, told members that tax money will decline or remain flat in fiscal 2010, and might increase only slightly the following fiscal year.

The average growth rate of gambling tax revenue historically had been about 5.5 percent, before it began declining by single digits the past few years, he said.

“This is sort of striking compared to what we’ve become used to, in terms of riverboat and wagering taxes,” Landers said.

The state received $818.9 million in tax money from the state’s casinos in fiscal 2008.

Today’s discussion was set to include proposed tax breaks for the so-called "racinos" and whether to allow table games. The racinos — which feature slot machines and electronic games, but not the table games found at traditional casino — say they are struggling to bring in enough revenue to make interest payments on debt they took out to pay state licensing fees.

Owners of Hoosier Park in Anderson and Indiana Live in Shelbyville were saddled with a hefty $250 million one-time state license fees for the slot machines. They also spent millions of dollars more to upgrade their facilities last year after slots were approved.

Hoosier Park could be in danger of going bankrupt, Indiana Gaming Commission Director Ernie Yelton said recently.

Indiana measures casino performance by adjusted gross receipts, or total gambling revenue minus payouts to players. In 2008, Indiana's 13 casinos eked out a modest 1.65-percent increase in AGR. But that's only because Hoosier Park and Indiana Live opened their expanded casinos midyear. The state's 11 existing casinos saw AGR drop 6.15 percent.

In other words, the racinos drew business away from the riverboats — a trend that seems to be continuing this year.

In July, AGR at Indiana Live climbed 27 percent, to $19.1 million, compared with the same month in 2008, when it had only a temporary gambling facility. At Hoosier Park, AGR improved by 4.6 percent. 

But some rivals are wilting under the economy and additional competition. AGR was down by double digits at several casinos, including Ameristar in East Chicago (21 percent), Majestic Star in Gary (18 percent) and French Lick Hotel & Casino (11 percent).

“We’ve had some flattening out and declines in revenue.” Landers said. “A lot of it has to do with racinos. They’ve displaced some business at the casinos. That’s obvious, to some extent.”

Overall, the state’s 13 casinos recorded AGR in July of $251.4 million, a 4-percent increase from the year-ago period.
 

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  1. A Tilted Kilt at a water park themed hotel? Who planned that one? I guess the Dad's need something to do while the kids are on the water slides.

  2. Don't come down on the fair for offering drinks. This is a craft and certainly one that belongs in agriculture due to ingredients. And for those worrying about how much you can drink. I'm sure it's more to do with liability than anything else. They don't want people suing for being over served. If you want a buzz, do a little pre-drinking before you go.

  3. I don't drink but go into this "controlled area" so my friend can drink. They have their 3 drink limit and then I give my friend my 3 drink limit. How is the fair going to control this very likely situation????

  4. I feel the conditions of the alcohol sales are a bit heavy handed, but you need to realize this is the first year in quite some time that beer & wine will be sold at the fair. They're starting off slowly to get a gauge on how it will perform this year - I would assume if everything goes fine that they relax some of the limits in the next year or couple of years. That said, I think requiring the consumption of alcohol to only occur in the beer tent is a bit much. That is going to be an awkward situation for those with minors - "Honey, I'm getting a beer... Ok, sure go ahead... Alright see you in just a min- half an hour."

  5. This might be an effort on the part of the State Fair Board to manage the risk until they get a better feel for it. However, the blanket notion that alcohol should not be served at "family oriented" events is perhaps an oversimplification. and not too realistic. For 15 years, I was a volunteer at the Indianapolis Air Show, which was as family oriented an event as it gets. We sold beer donated by Monarch Beverage Company and served by licensed and trained employees of United Package Liquors who were unpaid volunteers. And where did that money go? To central Indiana children's charities, including Riley Hospital for Children! It's all about managing the risk.

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