INDIANAPOLIS — A House committee is considering changes to the distribution of gaming taxes that could reduce the revenues received by local governments throughout Northwest Indiana.
House Bill 1350, sponsored by state Rep. Todd Huston, R-Carmel, would carve $18 million from the $48 million annually paid out of the state's general fund to local units and state agencies as a supplement to their shares of the $3 per patron admission tax that casinos pay each time a person enters their gaming floors.
The $18 million instead would be used to cover the state's cost of eliminating what Huston calls "double taxation" of casinos, due to Indiana assessing income tax on casino earnings that were paid directly to the state as slot machine or table game wagering taxes.
In addition, the legislation would replace the $3 admission tax with an additional 3 percent wagering tax to encourage casinos to further develop their properties without repeatedly having to pay admission tax when a customer moves from a casino to a restaurant to a hotel and back.
Huston insisted his goal is not to harm local communities but to make Indiana's 13 casino properties as financially competitive as possible, given the growing number of casinos in neighboring states and the tribal casino under construction in South Bend.
"We have to recognize that we're not the only game in town anymore," he said.
According to the Indiana Gaming Commission, the casinos in Hammond, East Chicago, Gary and Michigan City accounted for 61 percent of the state's admissions during the 2016 budget year.
As a result, reducing the supplemental admission tax distribution by 38 percent would cost Region governments $9.8 million a year.
Additional slices are paid to the Northwest Indiana Law Enforcement Academy and the county tourism agencies.
Replacing the admission tax with an additional wagering tax also likely would further cut local government revenues by an indeterminate amount as more casino admissions do not automatically translate to additional gambling.
For example, the Blue Chip Casino in Michigan City ranked second in the state last year for payment of admission taxes, but was fifth in wagering taxes.
In the end, Huston agreed to work with local government stakeholders to minimize the financial impact of his proposal prior to an expected committee vote next week.