Justin Schneider, Herald Bulletin
justin.schneider@heraldbulletin.com
INDIANAPOLIS - Slot machine gaming has taken another step in its long, slow march through the legislative process.
On Thursday, a 10-member conference committee held its initial meeting on House Bill 1835, which would authorize slot machines at Indiana horse racing tracks. The committee took testimony and recessed without action; members may continue to work on the matter until the April 29 adjournment of the current legislative session.
"This issue has come before the general assembly in the past, and we know the pros and cons," said state Sen. Tim Lanane, D-District 25. "My focus is on my county and what it means in terms of economic development and job creation."
The House and Senate each passed different versions of the bill, and Thursday's meeting was the first step in the drafting of a committee report to create a unified version of the bill.
"Yes, we are prepared, in a cautious fashion, to go forward," said Rep. Trent Van Haaften, D-District 76, the bill's original author. "The questions facing this conference committee are the licensing fee, the tax rate and the number of slot machines allowed at the tracks."
The bill represents the latest attempt to authorize slots for Hoosier Park in Anderson and Indiana Downs in Shelbyville. In March, a senate committee increased the one-time licensing fee from $100 million to $400 million per facility and cut the number of slot machines from 2,500 to 1,500 apiece.
Sen. Luke Kenley, R-District 20, voted against the bill in the senate and said he would propose an amendment to sell that licensing fee at auction.
"A licensing fee of $400 million has been called outlandish compared to similar fees that have been paid," Kenley said. "I will support an amendment to put this into public auction. We need to maximize the value for the people of this state."
But Will Cummings said similar auctions have failed, including one in Illinois. The auction yielded a winning offer of $518 million, but the matter is in litigation and Illinois has not been paid.
As founder of Cummings Associates, a Massachusetts-based consulting firm specializing in gaming, Cummings was hired to conduct a study on the viability of slot machines at Hoosier Park.
He determined that 5,000 machines could bring in $534 million in revenue. At the current level of 3,000, that number falls to $382 million.
"The total revenue critically depends on the number of slots - the more slots, the more revenue," Cummings said. "With 60 percent of the machines, you can generate 70 percent of the revenue."
Larry Smallwood, chairman of the Indiana Horse Racing & Breeding Coalition, said slot machine revenue will increase race purses, improve competition and yield benefits for Indiana's horse industry.
"A breeder's award would be 20 percent and the owner's award another 20 percent of the purse," he said, adding that only in-state operations qualify for such awards. "That will make people want to come in to the state of Indiana to breed horses and race horses."
Representatives of riverboat gaming and casino operations in southern Indiana spoke in opposition to the bill.
"This is going to take 10 to 15 percent from the boats, maybe more like 30 from us," said Mark Liedle of Belterra Resort & Casino. "We won't gain any of that back. We're faced, Belterra is, with losing $6.6 million."
At least one committee member disagreed with the comparison, saying "racinos" attract a different crowd than resort casinos.
"You're coming in on the back side of this bill trying to get a tax credit," said Sen. Robert Jackman, R-District 42. "I think you're trying to attract an entirely different clientele."
The conference committee also includes Rep. Sean Eberhart (R-District 57), Rep. P. Eric Turner (R-District 32), Rep. Jack Lutz (R-District 35), Rep. Matthew Whetstone (R-District 40), Rep. Robert Kuzman (D-District 19) and Sen. Lindel Hume (D-District 48).
"This is an economic development issue for our community," Lutz said. "If we were to bring 800 to 1,000 jobs to Madison County and Shelby County, we wouldn't be sitting here now. We would be holding a press conference to announce them. If you take a look, you'll see a community that once employed 25,000 people in high-paying manufacturing jobs."