Northwest Indiana casinos faced increased competition from the recently opened casino in New Buffalo, Mich., but their biggest threat may soon emerge from across another state border.
Illinois Gov. Rob Blagojevich and Illinois Senate President Emil Jones on Monday dusted off plans for a city casino and two other new gambling venues to fund up to $250 million in subsidies for the Chicago area's cash-strapped mass-transit systems.
The package, part of a $26.4 billion state capital program, would steer operating funds to the Regional Transportation Authority -- which faces a Nov. 4 cash crunch that could lead to fare hikes and service cuts for bus and train riders.
But the money that could help Illinois residents could hurt Northwest Indiana.
David Schugar, general manager and vice president of Majestic Star Casinos in Gary, said he is "watching the market and our competition" to make sure his boats provide the best gaming experience possible.
Northwest Indiana casinos spent billions of dollars renovating and adding perks to their boats before Four Winds casino arrived in New Buffalo last month. Their marketing approaches and promotions managed to keep gamblers playing in Northwest Indiana despite the allure of a bigger, newer facility. Initial numbers showed New Buffalo had only a minor effect on the Northwest Indiana casino profits.
If Chicago decides to add casinos, Northwest Indiana casinos will make their boats even shinier and larger, and they will be able to survive, said Ed Feigenbaum, editor of Indiana Gaming Insight.
"They worked very hard to keep those people away from Four Winds, to make it very worth their while to stay," Feigenbaum said. "You will see the same type of thing happening if there's increased competition of any kind. The existing casinos will focus on the people they think are their patrons."
Northwest Indiana casinos have a major advantage because their renovations and changes are already under way, Mike Smith, president of the Casino Association of Indiana, said.
But even if the region's casinos don't make any major changes, an additional casino or two probably won't hurt them because there is such a large gambling market, Feigenbaum said.
"It goes against a lot of the traditional concepts of economics, but the Chicagoland market seems to be so big, so broad, and there seems to be so much demand that the casinos already in place can survive," he said.
Sun-Times News Group contributed to this story.