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Massive gambling bill sails through Indiana House

April 15, 2019

A massive gambling bill passed another major hurdle Monday in the Indiana General Assembly.

The Indiana House voted 78-15 to approve Senate Bill 552, which would legalize sports wagering, permit a Gary casino to relocate from Lake Michigan to a more convenient interstate location and allow a new casino in Terre Haute. The bill returns to the Senate, where more amendments are expected before final passage.

Spectacle Entertainment—which recently acquired Gary casinos Majestic Star I and Majestic Star II—would have to pay a $50 million fee if it chooses to move forward with plans to close the existing riverboats and instead open a casino at an interstate location in the city.

The new casino would be allowed to have 2,764 gaming positions, which is significantly more than the 1,684 positions now at the two Gary casinos combined.

If all of the gaming positions were utilized—and most casinos do not use all of the gaming positions allowed by the state—it would be the largest casino in Indiana, a fact that has drawn concern from other casino operators.

Spectacle has proposed opening a $300 million casino along the Interstate 80/94 corridor in Gary and closing the existing casino boats in Buffington Harbor.

The latest version of the legislation would also require Spectacle to pay an additional $50 million if the company sells the casino within five years.

The other license currently controlled by Spectacle would be surrendered to the state, and the state would terminate it, according to an amendment to the bill that lawmakers approved on Thursday.

A new license would be created to establish a casino in Vigo County, where Terre Haute is located.

If the Gary casinos are consolidated and a Terre Haute casino opens, the state would have 12 casinos and two horse track casinos in total.

The bill would create a Vigo County advisory board that would evaluate the companies interested in using the newly created license to open a casino in Terre Haute and, with the help of the Indiana Gaming Commission, select three that would be eligible to bid. The legislation sets the minimum bid at $25 million.

If there aren’t three bidders interested, then the advisory board and the gaming commission could choose to move forward with two proposals. If there is only one proposal, the process would start over.

The number of games that would be allowed at the new Terre Haute casino is not addressed in the bill, as currently written. Rep. Todd Huston, R-Fishers, who sponsored the bill in the House, said game number are under discussion, but the average is about 2,000 games.

Spectacle would be allowed to bid on the Terre Haute license, regardless of what it decides to pursue in Gary. The company has already expressed interest in doing so and has proposed opening a $100 million to $150 million casino in Terre Haute.

An amendment added to the bill on Thursday would require any meeting between the governor and casino company officials be held in public with 48-hour notice. That move was in response to a report from The Indianapolis Star that casino owner Rod Ratcliff flew Gov. Eric Holcomb to meetings in Colorado in July, giving Ratcliff hours of exclusive access to the governor.

Also under the legislation, sports wagering would be legalized starting in September with a 9.5% tax rate in the House-approved version of the bill. The tax rate is higher than some states, such as Nevada and New Jersey, where the rates are 6.75% and 8.5%, respectively. But it’s lower than others like Mississippi or West Virginia, where the rates are 12% and 10%.

The bill would not allow mobile sports betting, despite concerns from advocates for sports wagering who say online betting is key in making legal sports betting viable. That’s because a significant portion of illegal sports betting takes place on smartphones. As currently written, the bill only authorizes sports wagering at casinos, racinos and satellite facilities.

The legislation would not require official league data to be used, even though some of the professional sports leagues have argued for lawmakers to mandate that in the bill.

Several lawmakers spoke about concerns they have with the bill’s current language but opted to support it as a way to keep the issue alive.

“It is a total work in progress at this point,” Rep. Terri Austin, D-Anderson, said.

Rep. Alan Morrison, R-Brazil, said he doesn’t think the bill as currently drafted has any chance of surviving and giving Terre Haute the option to get a casino.

Morrison, who has worked on sports betting language for years, also said he thinks the mobile option needs to be added back into bill.

“I understand it’s not all about dollars, but it’s a lot about dollars,” Morrison said, as he emphasized that the state would see much higher revenue from sports gambling if Hoosiers are allowed to place bets on their smartphones.

Rep. Justin Moed, D-Indianapolis, said he’s worried about the bill removing the limit on the number of casino licenses a single operator is allowed to control. Current state law caps it at two licenses per operator, but the Indiana Gaming Commission allowed Caesars Entertainment to acquire the state’s two horse-track racing casinos last year even though the company also operates two other casinos in the state.

Removing the cap would also allow all of the existing casino operators the option to bid on the new Terre Haute license.

“It’s a very big public policy change we’re making here,” Moed said.

 

 

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