Indiana casino taxes falling faster than anticipated

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Indiana's casino tax revenues have fallen faster than expected over the past six months, plunging nearly 15 percent amid more out-of-state competition and lagging admissions as consumers try to shake off the after-effects of the recession.

Indiana saw a $50 million drop in casino tax revenues since June when compared with a year earlier. That's about $5 million more than state officials had forecast.

Casino Association of Indiana President Mike Smith and Indiana Gaming Insight editor Ed Feigenbaum agreed Monday that the recession's lingering pressures on consumers play a role not just in Indiana but nationwide.

The money the state collects from casino taxes has dropped from a peak of nearly $876 million in 2009 to about 752 million in fiscal 2013, according to figures from the Indiana Gaming Commission. Indiana's three casinos near Cincinnati have seen big declines since a downtown casino opened in the Ohio city last March.

In recent years, Indiana's casino industry has pleaded with state legislators for economic protection from increasing out-of-state competition. But some Indiana lawmakers last year said they were ready to let the casinos try to survive on their own.

This year, the only bills submitted related to gambling involve charity games, not casinos.

An annual report by the Indiana Gaming Commission's executive director, Ernest Yelton, put the biggest share of the blame for lower tax revenue on out-of-state casinos, but acknowledged that "a confluence of a lackluster economy, competition and legislative relief" were all involved in the drop.

"We've seen revenue drop in every calendar year since the recession in 2009," said Ed Feigenbaum, editor of Indiana Gaming Insight, which tracks gambling in the state.

While competition has had a "tremendous effect," Feigenbaum said, "It's more complicated than that."

Fewer people have been going to casinos in recent years simply because they can't afford it, he said.

"People don't have as much disposable income, they don't have as much money they can spend," Feigenbaum said. "They used to choose between going to a high school basketball game or the casino. Now, it's between going to the casino or paying their mortgage."

Mike Smith, president of the Casino Association of Indiana, agreed.

"I think ever since we had the major recession, it's just taking a lot longer for us to get back to where we were," he said Monday.

Nor is Indiana alone, both men said.

"Every other market in the country has seen the same thing happen," Feigenbaum said, including Las Vegas, the magnet of American gambling.

Casino revenue at the nation's second-most popular site, Atlantic City, fell below $3 billion last year for the first time in 22 years. It marked the seventh straight year of plunging gambling revenue.


  • Don't Change to Keep Up
    What do our legislators expect of gambling income? They are always behind the times compared to the rest of the country in making any changes on any topic. What is so important about a water based casino? Why not make the casino smoke free? Why not table games at the racinos? Why not a casino in downtown Indianapolis? If they were in a real market business model, they would quickly fail because they never make changes that relate to the market they serve. Try keeping up with surrounding states on gambling trends, Sunday alcohol sales and a myriad of other topics. Maybe they are proud to be "always last in the country"!
  • Agreed
    Pete - I couldn't agree with you more. Well stated!
  • IN Casinos
    Recently went to Hollywood in Lawrenceburg, it was a ghost town. Clearly everyone from Cincy area is staying local at the new casino. Hollywood spent tons of money in the recent past to try to keep its customers, probably not the best idea. I am surprised it is only a 15% decline, I bet it is closer to 33% at this time next year. Probably need to allow live table games at Shelbyville and Anderson casinos to compete. I can drive to Cicny almost as quickly as I can drive to Lawrenceburg from Indy and enjoy a smoke-free gambling environment. The lawmakers should make some quick changes before all the revenue is gone.
    • Agreed!
      Yes, it's already moving that way in Kentucky. A pot plant with zero THC would be a boon to our economy, the oil from the seeds, the textile possibilities... all made legal would really give the farmers something that does not need pesticides (which currently pollute our water systems) or herbicides or fertilizer. It grows in almost any environment in Indiana. Vote out Pence and get someone who is progressive and can see solutions instead of trying to galvanize his conservative base.
    • Agricultural state marijuana
      Indiana needs to stick to its core expertise, agriculture. We mastered farming and the next major crop for the United States is marijuana. We are foolish if we don't lead the charge, thereby owning the crop that will lead to tremendous revenues for the state of Indiana.If only our governor was a visionary and notsuch a puritan!
      • I know how to fix this!
        What we need is another group of wealthy connected Republicans in the state to step forward and demand zoning variances, tax abatements and state & federal grants to develop the main hall at Union Station as a Vegas style casino. With the use of public money, these Republicans can redevelop the beautiful Union Station into one of the Midwest's swankest casinos. Going forward with such a prudent use of taxpayer money would give these folks a place to meet every year to discuss how their political candidates can be more effective at fighting the scourge of the poor, or as called by these folks, the "taker" class. Problem solved GOP style!

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