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A House committee approved a bill tonight to give temporary
tax breaks to three Indiana casinos, including new ones at the state’s two
pari-mutuel horse tracks.
The House Ways and Means Committee voted 17-7 for a bill to
give tax breaks on wagering revenue for Blue Chip Casino on Lake Michigan, and
casinos at Hoosier Park in Anderson and Indiana Live at Shelbyville. The bill
now goes to the full House for consideration.
Advocates said the casinos are struggling and need help to
stay in business. Critics said many other businesses in the state are facing
hard times in the sagging economy, and it was not fair to single out the
casinos for special favor.
The General Assembly passed legislation in 2007 allowing
Hoosier Park and Indiana Live – then called Indiana Downs – 2,000 slot machines
each at their pari-mutuel venues.
Track officials said revenue from the slots was needed to
keep their tracks and the horse racing in Indiana viable, and they agreed to
pay $250 million each over two years to get the slots, as well as spend at
least $100 million each to build the new casinos. The state imposed a graduated
tax on revenue from slots at the so-called “racinos,” which opened
last summer.
Under the bill, tax rates on the slot revenue at the tracks
would be cut 5 percentage points for each of the next five years, reducing
their combined annual tax liability by about $18 million per year.
John Keeler, a lobbyist for Hoosier Park, said its parent
company, Centaur LLC, was under severe financial distress and was paying high
interest for loans it obtained to pay the slot licensing fees. He also said the
track and the state had misjudged revenue projections from the slots.
“Quite frankly, the tracks blew it and so did the
state,” he said.
The bill also would provide a $15 million tax deduction to
Blue Chip for one year, to be phased down and out over five years. The
deduction is projected to cost the state about $5 million in lost tax revenue
the first year and less in subsequent years, said Democratic Rep. Scott Pelath
of Michigan City, the bill’s author.
Blue Chip’s business has taken a hit since the opening of
the Four Winds casino in Michigan, which opened in August 2007 about 10 miles
from Blue Chip and is owned by the Pokagon Band of Potawatomi Indians. Blue
Chip saw its monthly revenue fall from $26.7 million in July 2007 to $16.1
million a year later – a decline of nearly 40 percent.
Ryan Soultz, a lobbyist representing Blue Chip, said the tax
deductions would allow the casino to enhance its marketing efforts and draw
more customers.
Several lawmakers who voted for the bill said they did so
with reservations, but said casino revenue was important to the state –
especially during this recession – and they wanted to keep the bill alive in
some form.
Rep.
Randy Borror, R-Fort Wayne, said the bill sent a wrong message to other
businesses that were struggling. He was among the seven who voted against the
bill.
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