Indiana faces $200M casino hit from outside competition

Indiana could lose up to $250 million in casino tax revenue if proposed casinos are approved in Kentucky and Ohio and planned expansions are made in Michigan, a fiscal analyst told lawmakers Monday.

Some of those casinos are planned near casinos in Indiana that draw many customers from neighboring states. Indiana’s 13 casinos generate about $900 million a year in taxes.

"Gamblers will seek out casinos most accessible to them," Jim Landers, an analyst with the Legislative Services Agency, told the legislative Gaming Study Committee. "We’re likely to lose significant traffic."

The LSA is the General Assembly’s nonpartisan research arm.

Ohio voters will decide in November whether to authorize casinos in Cleveland, Columbus, Cincinnati and Toledo. Ohio Gov. Ted Strickland fought successfully to include video lottery machines at horse tracks, some near Indiana, but the state Supreme Court ruled in a legal challenge to put the issue before voters.

Kentucky Gov. Steve Beshear wants to legalize either slot machines or casino-style gambling at racetracks throughout his state. Michigan has more than 20 tribal casinos and proposals for more.

The Gaming Study Committee has been looking into numerous gambling issues over the past several weeks, including a proposal to move one of Gary’s two Lake Michigan riverboat casinos inland near a major freeway intersection. There is also talk of allowing a referendum that could lead to transferring a license for the other Gary casino to somewhere in northeastern Indiana.

Indiana Sen. Luke Kenley, chairman of the Gaming Study Committee, said he was not sure whether the panel will recommend gambling legislation for the session that starts in January.

"A better expectation would be there will probably be a lot of findings and that will open it up for a free-for-all when the session starts," the Noblesville Republican said.

According to the LSA report, the Horseshoe Southern Indiana casino near Louisville could lose close to 40 percent of its customers and the state could lose $41 million in wagering tax revenue if casinos opened in Louisville and Lexington, Ky.

If casinos were opened in the Ohio cities of Cincinnati, Dayton and Columbus, the three casinos in southeast Indiana — Grand Victoria in Rising Sun, Belterra near Vevay and Hollywood in Lawrenceburg — could lose up to 38 percent of their admissions. It would cost the state up to $86 million in wagering tax revenue. The hit likely would be even greater if casinos at Kentucky horse tracks were opened, the report estimated.

If a casino is built in Ellis Park, Ky., Casino Aztar in Evansville — only about six miles away — could lose 17 percent to 21 percent of its annual admissions, according to the LSA.

Four casinos in Indiana’s Lake County already compete with four casinos in the Chicago area, where a fifth casino is planned. But the LSA report said the new Illinois casino would likely have no significant affect on the Lake County casinos since it will be 40 to 50 miles from Horseshoe Casino in Hammond, its nearest Lake County competitor.

Meanwhile, Fort Wayne Mayor Tom Henry asked the committee to recommend to the Legislature that Fort Wayne residents vote on whether the city should be allowed to have a casino. He said it could bring jobs to the area and vowed to vigorously pursue a casino with voter approval. Some opponents said Indiana already is saturated with gambling and a Fort Wayne casino would lead to more crime, bankruptcies and other social costs.