Indiana casinos on average pay the highest effective tax rate in the Midwest, according to a report by the Casino Association
The Times of Munster reported Sunday that the study found Indiana casinos pay taxes averaging 38 percent
of revenue. Casinos pay wagering taxes of between 15 percent and 40 percent on money bet on the floor and pay $3 to $4 per
person in admissions taxes.
Casinos also pay a percentage of revenue directly to local governments. Altogether,
the taxes topped $1 billion in fiscal 2009, The Times reported, citing a state report.
"Nobody else pays taxes
like we do," said Mike Smith, president of the Casino Association of Indiana, a state group that supports Indiana’s
riverboat casino industry. "Before you pay that first nickel of expense, 40 cents is gone from that dollar right off
Casinos in neighboring states pay less, The Times reported. In Illinois, the effective tax rate
ranges from 20 percent to 36 percent. Detroit casinos pay 21.2 percent and Michigan tribal casinos pay only 3 percent.
The owners of Indiana’s two casinos at horse-racing tracks in Anderson and Shelbyville, which opened just last year,
already have told state lawmakers they’d like lower taxes. The two casinos pay a combined effective tax rate of 46.2 percent.
But reducing casino taxes could have its drawbacks. Gambling tax revenue makes up about 7 percent of the state’s annual
budget and is the third-largest source of state revenue behind income and sales taxes. Any cuts would have to be made up elsewhere,
either by raising taxes elsewhere or cutting state services.
Smith said lower taxes could help spur capital investment
and casino expansions. Casinos in Indiana aren’t as likely to expand because they’ll just end up paying more money in taxes,
However, that didn’t stop Horseshoe from launching a new $485 million Hammond casino a year ago, nor did
it block the $130 million, 22-story hotel Blue Chip that opened in February.
Don Barden, who owns two Lake Michigan
casinos and wants to move one to a Gary site near the intersection of Interstate 65 and two other freeways, said Indiana should
be doing everything it can to help its casinos.
"It’s time for the state to look at maximizing its assets
in the gaming industry," Barden told a legislative committee that’s studying gambling issues. That means accepting that
casinos are here to stay and making Indiana casinos as welcoming as possible, he said.