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Newly opened racinos already face credit crunch

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Year In Review

Hoosiers’ long ride on the gambling gravy train finally may be coming to an end. Casinos have swelled into a $2.7 billion industry here—one that pays over $800 million in annual state and local taxes and ranks as the state’s third-largest source of revenue.

But in 2009, clear signs emerged that the Hoosier gambling market is oversaturated. Major credit rating agencies expressed concerns that several casinos, including the state’s new horse track “racinos” on the outskirts of Indianapolis, might go bust before the year was finished. And even if all 13 Indiana casinos remain afloat, they face the daunting prospect of additional competition across the state’s borders.

Hoosier Park owner Centaur Inc. defaulted on its $400 million in debt. (IBJ File Photo)

Those concerns proved prophetic. In October, Indianapolis-based Centaur Inc., owner of Anderson’s Hoosier Park, missed a $13.4 million payment due on more than $400 million in outstanding debt, putting the company in default with its lenders.

After winning the General Assembly’s approval in 2007 to install slot machines at Hoosier Park, Centaur borrowed heavily to pay Indiana’s $250 million license fee and spent another $150 million on mandatory Hoosier Park upgrades.

The Legislature’s Interim Gaming Study Committee spent the summer investigating Centaur’s situation, as well as the likely impact of border state market encroachment.

Centaur complained that Indiana’s ongoing gambling taxes, not the $250 million license fee, are what’s crippling it. Hoosier Park and its Shelbyville counterpart Indiana Live! must fork over 47 percent of their gambling revenue to the tax man, compared with the 35-percent rate riverboats pay. Most of the difference goes to subsidize Indiana’s horse racing industry.

The year closed with several state representatives and senators pledging to introduce gambling legislation allowing riverboats to move onto land, eliminating their requirement to maintain engines and crews, and reducing racino taxes.•

 

 

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  1. Now if he'd just stay there...

  2. Daniel - what about the many US citizens who do NOT follow what the Bible teaches? The Hindus, Jews, Muslims and others who are all American citizens entitled to all rights as Americans?? This issue has NOTHING to do with "What the Bible says..." Keep all Churches separate from State! Pence's ongoing idiocy continues to make Indiana look like a backwards, homophobic state in the eyes of our nation. Can't we move on to bigger issues - like educating our kids?

  3. 1. IBJ should link to the referenced report. We are in the age of electronic media...not sharing information is lazy. Here is a link http://www.in.gov/gov/files/Blue_Ribbon_Panel_Report_July_9_2014.pdf 2. The article should provide more clarity about the make-up of this panel. The commenters are making this item out to be partisan, it does not appear the panel is partisan. Here is a list of the panel which appears to be balanced with different SME to add different perspectives http://www.in.gov/activecalendar/EventList.aspx?view=EventDetails&eventidn=138116?formation_id=189603 3. It suggests a by-pass, I do not see where this report suggests another "loop". 4. Henry, based on your kneejerk reaction, we would be better off if you moved to another state unless your post was meant as sarcasm in which case I say Well Done. 5. The article and report actually indicates need to improve rail and port infrastructure in direct contradiction to Shayla commentary. Specifically, recommendation is to consider passenger rail projects... 6. People have a voice with their elected officials. These are suggestions and do not represent "crony capitalism", etc. The report needs to be analyzed and the legislature can decide on priorities and spending. Don't like it, then vote in a new legislature but quit artificially creating issues where there are none! People need to sift through the politics and provide constructive criticism to the process rather than making uninformed comments in a public forum based on misinformation. IBJ should work harder to correct the record in these forums when blatant errors or misrepresentations are made.

  4. Joe ... Marriage is defined in the Bible ... it is mentioned in the Bible often. Marriage is not mentioned once in the US or Indiana Constitution ...

  5. Daniel - Educate me please: what does the Bible have to do with laws? If the government wasn't in the business of marriage to begin with, then it wouldn't have to "define" marriage at all. Marriage could be left as a personal, religious, or otherwise unregulated action, with no ties to taxes, legal status, etc. Then people could marry whomever they want, and all this silliness would go away. Remember to vote Libertarian in November.

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