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New tax break reduces Indiana share of casino revenue

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The state's portion of gambling revenue slumped last month as Indiana's 13 casinos took advantage of a new law that allows them to reduce their tax burden.

Total tax receipts from casinos fell nearly 18 percent last month compared with May of last year, according a report released Monday by the Indiana Gaming Commission.

Jenny Reske, deputy director of the commission, told The Indianapolis Star that much of that drop resulted from casinos deducting coupons that they use to attract gamblers by letting them play for free, as allowed under a law passed by this year's General Assembly.

The new law allows casinos to deduct up to $5 million a year on the coupons. However, the state's fiscal year doesn't start until July 1, so lawmakers allowed casinos to deduct half that amount last month. Six casinos deducted the entire $2.5 million, and all but three deducted more than $1.5 million, the report said.

The tax break is intended to help Indiana casinos compete on the same basis as those in neighboring states such as Ohio and Michigan, where the coupons aren't taxed.

"Our ability to have a more level playing field with other states is something that will help us in the long run," said Daniel Nita, regional president and general manager for Horseshoe Casino in Hammond. "It allows businesses to remain competitive without having to take other measures."

Four new casinos have recently opened in Ohio, including one in Cincinnati, less than an hour's drive from three riverboat casinos in southeast Indiana.

But Reske pointed out the new Ohio casinos are owned by Caesar's Entertainment Corp. and Penn National Gaming, which also own casinos in Indiana.

The industry asked the General Assembly to allow land-based gambling for riverboat casinos and live dealers at the state's two racinos, but the tax break was about the only one casinos got. Gov. Mike Pence and several Republican legislative leaders have opposed expanding gambling, and the portion of state revenue from casino taxes has dropped significantly in recent years.

Despite the relief, casino revenues dropped 5.8 percent from May 2012.

Reske said the gaming commission will study over the next two years whether the free-play deductions benefit state in ways by increasing casino revenue or employment.

"That will be important in considering now how to move forward," she said.

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  • coupon taxes?
    With those coupons the casinos are giving away free money. While I'm no accountant I wouldn't expect Coca Cola to be charged taxes on the dollar amount of coupons which they have redeemed. Businesses pay taxes on their revenue, and that amount is directly increased as a result of what they give away for promotions.

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  1. Really, taking someone managing the regulation of Alcohol and making himthe President of an IVY Tech regional campus. Does he have an education background?

  2. Jan, great rant. Now how about you review the report and offer rebuttal of the memo. This might be more conducive to civil discourse than a wild rant with no supporting facts. Perhaps some links to support your assertions would be helpful

  3. I've lived in Indianapolis my whole and been to the track 3 times. Once for a Brickyard, once last year on a practice day for Indy 500, and once when I was a high school student to pick up trash for community service. In the past 11 years, I would say while the IMS is a great venue, there are some upgrades that would show that it's changing with the times, just like the city is. First, take out the bleachers and put in individual seats. Kentucky Motor Speedway has individual seats and they look cool. Fix up the restrooms. Add wi-fi. Like others have suggested, look at bringing in concerts leading up to events. Don't just stick with the country music genre. Pop music would work well too I believe. This will attract more young celebrities to the Indy 500 like the kind that go to the Kentucky Derby. Work with Indy Go to increase the frequency of the bus route to the track during high end events. That way people have other options than worrying about where to park and paying for parking. Then after all of this, look at getting night lights. I think the aforementioned strategies are more necessary than night racing at this point in time.

  4. Talking about congestion ANYWHERE in Indianapolis is absolutely laughable. Sure you may have to wait in 5 minutes of traffic to travel down BR avenue during *peak* times. But that is absolutely nothing compared to actual big cities. Indy is way too suburban to have actual congestion problems. So please, never bring up "congestion" as an excuse to avoid development in Indianapolis. If anything, we could use a little more.

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