VIEWPOINT: Why did we allow gambling to seduce us?

December 24, 2007

The money is seductive: an "easy" $1.6 billion. That's what gambling brought to Indiana in taxes this year. The prize might not be as big in 2008. There's new competition. And a big drop in gambling revenue would spoil the negotiations that all the nervous Indiana politicians have been doing. Their jobs are on the line, and they know it. Hoosiers are embarrassed. They don't like that.

I have a beautiful picture of two of my children standing inside the huge gaping fireplace along the western wall of the rotunda of West Baden Springs Hotel, taken in 2000. They were younger then, and the rotunda was bare to the walls, an acoustic marvel. It was, until 1963, when the AstroDome was built, a former "Wonder of the World" as the hotel supported what was then the world's largest free-standing dome. Now, the hotel and its neighbor, the French Lick Casino and Hotel, have returned to the status of "destination." What caused the West Baden hotel to reappear on the list is simple: casino gambling.

There's a madness nearby. It consists of a moat. At the center of the moat, anchored in dry ground, is a "riverboat." The riverboat is used to confine the gambling, so it doesn't bleed out into, say, a nearby convenience store-the kind you might see on Sahara Boulevard in Las Vegas. Orange County fought long and hard to get gambling in French Lick and West Baden. Industry had dropped. Kimball Corp.'s plants had seen better days, along with other bits of rust there.

It looks lovely, the rejuvenated, gambling-enhanced view down State Road 56 through town. There's far more than a coat of paint, and a sense that economic rough times are over. The sad part is that this might only be temporary.

Kentucky's governor-elect, Steve Beshear, ran on a platform that, among other things, sought to legalize casino gambling. Kentucky is already miles ahead in racetrack and off-track betting. Indiana's southern riverboat casino destinations would be hurt if Kentucky went through what would be at least a threeyear process to get casinos legalized, built and functioning. Kentucky's tourism is also highly evolved and Kentucky adjoins seven states, with two more close by. Lights could dim in casinos from Lawrenceburg to Evansville.

If Michigan or Illinois or Ohio also entertained gambling expansion, revenue could drop even further. Add the chili sauce of declining lottery revenue from a declining economy, and overall lottery and gambling tax revenue could suffer a drought.

Gambling revenue should have been considered "found money," rather than a reliable revenue stream. Indiana's tourism has been hurt by declining funding of state parks, focusing largely on Indianapolis sports tourism, rather than a diversified set of regional destination marketing plans.

There were a lot of arguments at each stage of Indiana's legalized gambling history, starting with the lottery, then casinos, then horse racing. Moral issues were raised. Dependence on dubious revenue projections was also raised. It took a lot of work to come to a consensus that permitted the graduating amount of gambling we have, and the portion of tax revenue that has emerged.

Now there's a crossroads that begs the question of direction: Should we entrench or liberalize gambling to keep ahead of interstate competition for gambling tax revenue, or should we start looking for other ways to prevent the seemingly mindless annual issues of reorganizing tax plans? Is tourism important in the face of rising gas prices and neighboring states' competition? Is there sufficient leadership to ask and answer the tough questions? Or will it once again come to the last three days of the Legislature, when the deals are usually made, and the recriminations that follow?

Let's see what's done this time. After all, November and new elections aren't that far away. Anybody wanna bet what happens?

Henderson is managing director of ExtremeLabs Inc., a local computer analysis firm.
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