These must be bittersweet times for those who warned Indiana against rolling the dice on gambling back in the late 1980s.
On one hand, they have the satisfaction of seeing their predictions come true. But confirmation of their fears about gambling comes at the state's expense. As IBJ reported last week, now that gambling taxes are the third-biggest source of revenue in the state budget, the gambling industry is faltering and the state's overreliance on what once seemed like easy money is becoming a major concern.
When the Indiana Lottery came into being in 1989, the plan was to set aside lottery revenue for educational purposes. The money that began rolling in was never intended to become a major pillar of the state's economy. But the lottery was followed by riverboat casinos and horse tracks in the mid '90s. By last year, casinos were raking in $838 million in state and local taxes and the lottery was chipping in another $217 million.
Now that the state is reliant on this revenue stream, many of the casino companies that supply it are on the verge of bankruptcy, and the likely legalization or expansion of gambling in neighboring states threatens to further erode Indiana's take.
If you wonder how desperate state lawmakers are to prop up the ailing industry, look no further than legislation approved by the Indiana House in February. The House approved four-year tax breaks worth $75 million for the two Indianapolis-area horse tracks that just paid the state $250 million each for the right to add slot machines.
It's not likely the measure will find traction in the Indiana Senate. We hope it doesn't. The state can ill afford to turn away revenue, and it's alarming that we're in a position of having to bail out casinos. Then again, that's what happens when we cast our lot with an industry that doesn't exactly have a firm foundation.