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Indiana casinos face falling revenue, new competition

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Indiana's nearly 20-year-old casino industry is facing declining revenues and growing out-of-state competition, prompting lawmakers to consider what, if any, regulatory changes might be able to stem the tide.

The General Assembly initially authorized riverboat gambling in 1993, which has slowly grown to include large barges, gambling at two horse racing tracks and a nearly land-based facility in French Lick.

Over the years, Indiana's 13 casinos have paid more than $10 billion in taxes — money that has become the state's third-largest revenue source behind sales taxes and income taxes. Casino revenue supports basic government services, such as school funding, child safety and corrections.

But those revenues are in decline. Last year, casino taxes accounted for $660 million in state tax revenue. And the latest budget forecast shows it'll drop to $617 million this fiscal year and to $567 million by June 2013.

Ernest Yelton, executive director for the Indiana Gaming Commission, told The Journal Gazette for a story published Sunday that adjusted gross revenue and the corresponding taxes have been down for three consecutive years.

The adjusted gross revenue — the amount wagered — was $2.7 billion in fiscal year 2011. So far this fiscal year, which ends in June, the state is down about 4 percent on taxes.

Fewer people are going to the state's casinos. In 2011, admissions fell to their lowest level since 1997, well before the addition of the slot machines at the horse racing tracks.

Yelton said one factor is the closing of two major bridges in both southern and northwest Indiana that restricted access to several casinos. Competition from casinos in Michigan and Illinois also is having a bigger effect than expected.

However, Yelton said the largest reason behind the decline is the economy.

"It's a trend. By all accounts, this is a slow recovery," he said. "Whenever you are in an economic recession, the first thing people look at is discretionary spending."

Ed Feigenbaum, editor of Indiana Gaming Insight, a publication that closely tracks gambling in the state, said it might be that Indiana has to accept a lower baseline of funding from legalized gambling in the state.

"We have to understand that the long gravy train has finally seen the caboose," he said. "There isn't going to be as much money. Other states have finally caught up."

Ohio's entry into the industry isn't helping matters. Four Ohio casinos are scheduled to open this year, with the Horseshoe Casino in Cleveland opening last Monday.

Legislators will be updated on the casino issues this summer during a summer study committee, said Sen. Ron Alting, R-Lafayette.

In 2011, Alting sponsored a bill that gave minor relief to casinos, such as making it easier to host card tournaments and saving money on crews for riverboats that never move. This year, lawmakers also gave an exemption for casinos from a new statewide smoking ban.

"We can't just sit idly by," Alting said.

One option is giving casinos substantial tax credits for investing in their properties, such as adding or upgrading adjacent hotels, theaters and restaurants. Alting said that would be a "real struggle" with some of his colleagues.

Rep. Phil GiaQuinta, D-Fort Wayne, said he's well aware of the growing concern about casino revenues as a member of the House Public Policy Committee.

GiaQuinta said he could be persuaded to give more tax credits to the industry for new investment if that investment would cause a long-term increase in revenue.

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  • easy, gambling in large hotels in Indianapolis
    this is an easy one, gambling casinos in all large hotels in the state. Invite in Donald Trump and all the casino owners from Las Vegas. Also, legalize the Indian tribes in Indiana to open casinos tax free. Rivers are a natural for this, the Wabash, the Tippecanoe, and the Ohio Rivers as gambling highways and Lake Michigan from Gary, Indiana. If this is an industry, which it is not, because it makes nothing, it redistributes wealth, instate and out of state. Maybe casinos attached to all shopping malls, Greenwood, Castleton, Keystone at the Crossing.
  • thats easy to solve
    The state can solve this easily, riverboat gambling in the Ohio River Indiana side, also, Indianapolis converts Union Station to a casino, that way central Indiana residents will not leave the state to gamble. Also, riverboat gambling in Gary , Indiana, Terre Haute, and all along the Wabash River from Lafayette to Terre Haute, to Vincennes. Riverboat tours and vacations as well.
  • Casino workers deserve smokefree air
    The article mentions that Indiana casinos are losing revenue to Ohio and Illinois casinos, but neglects to mention that those regional competitors are smoke-free for worker health.

    In other words, Indiana's smoke-filled casinos are losing revenue to smoke-free competitors - without a local or statewide clean air law in Indiana to blame for it. Meanwhile, Indiana's casino workers, in order to provide for their family in a tough economy, must face the health hazards of secondhand smoke on a daily basis including cancer, heart disease, COPD, and many other preventable diseases, and associated healthcare costs.

    Indiana lawmakers should take a cue from states like Ohio, Illinois, Maryland, and Massachusetts and ensure that casino jobs don't sicken the very people those jobs are intended to help. Even sophisticated casino ventilation systems do not protect people from the serious health hazards of secondhand smoke.
    • No Worries
      The Hoosier Lottery will soon pass internet gambling rules and bypass all these foolish surrounding states.

      Only problem is the Lottery Commission is planning to funnel most gains to politically connected friends as part of Mitch Daniel's Lottery privatization plan in the next 6 months.
    • Clueless
      Indiana lawmakers are clueless in setting up laws. When they allowed casinos in Indiana they left out the most important factor in attracting patrons. REAL MONEY is absent. As a patron having a choice which one of the following would you pick? A casino with real game tables with real money, real cards and a live dealer, even a free cocktail, given a chance to play the odds with cards. Or would you rather play in Indiana with paper coupons in payment, have a computer decide your odds on every bet you place. I also miss the sound of the coins falling in slots, people with cups of coins, the excitement of the crowd. I quit playing Indiana casinos years ago. I could play computer games at home and have a better chance of the odds.
    • Casino
      We live here and love to go to the casino ! Times are alittle harder now ,but when you go to the casino and see what little bit they do pay back go across the border it make you mad ! So we dont go as offen anymore . Hoosier Park and Risening Star are the best we think .

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