An Indiana Senate committee on Wednesday endorsed plans aimed at helping the state's casinos stave off growing competition, although its fate is uncertain, with some legislators worried about the potential loss of $100 million annually in taxes from the industry and others wary of any gambling expansion.
The Senate Public Policy Committee voted 9-0 in support of a bill that would overhaul the state's casino taxes, along with allowing Indiana's 10 riverboat casinos to move inland to adjacent property and permit live table games at the two horse track casinos.
Casino officials told committee members that Indiana has some of the highest gambling tax rates in the country. The bill would eliminate the current $3-per-person admission tax in favor of a slight increase in the tax on the casino's gambling profits and drop taxes on gambling credits given to visitors.
Ryan Soultz of Michigan City's Blue Chip casino called that a tax on a marketing expense. He said eliminating the tax "would allow us to market much more aggressively. It would allow us to do more promotionally."
The state is already expecting a 15-percent drop in tax revenues from its 13 casinos — from $614 million it collected last year to about $520 million for the 2015 budget year. State officials blame the decline in part on new casinos in Ohio, Michigan and Illinois taking business away from the Indiana sites.
Little attention was paid to the projected state tax revenue loss during Wednesday's hearing. That will change as the proposal now goes to the Senate Appropriations Committee, whose chairman, Luke Kenley, R-Noblesville, said he's skeptical of the tax overhaul.
"I knew that the casinos wanted to do some changes in their operating position, for example vis-a-vis their location or their profile on their current location. I didn't realize they were seeking a tax cut," Kenley said. "I'm not sure that's there any reason for us to give them a tax cut. I mean why should we give them a tax cut? I don't understand that."
Soultz argued that Indiana casinos face a severe tax disadvantage. He said the Michigan City casino pays an effective state tax rate of about 32 percent, while a nearby tribal casino across the state line in Michigan pays less than 8 percent.
Jim Brown, chief operating officer of Indianapolis-based Centaur Gaming, said the company's Hoosier Park casino and horse track in Anderson could add a few hundred jobs if it is allowed to have live table games, such as blackjack and roulette. Only electronic gambling machines are currently allowed at Hoosier Park and Indiana Grand Casino in Shelbyville.
Brown said Indiana's casinos are facing their greatest threat since the first one opened 17 years ago.
"We're not asking for handouts. We're not asking for bailouts," Brown said. "We're asking for your help in taking our industry and assisting it legislatively in becoming more competitive against out-of-state competition."
Senate Public Policy Committee Chairman Ron Alting, R-Lafayette, said he knows supporters of the changes will face arguments that they would represent an expansion of gambling in the state. Alting disputed that notion, saying casinos wouldn't be allowed to move from their current properties and that the additional live table games at the horse track casinos are already available in electronic versions.
"Maybe we need to look in the mirror and revisit what we believe the definition of expanding of gambling is," Alting said.