Could Gary become a one-casino town?

By Patrick Guinane, Times of Northwest Indiana
patrick.guinane@nwi.com

INDIANAPOLIS | As the legislative session careened toward an incomplete halt last week, it became clear that no casino riverboat is an island.

Gov. Mitch Daniels acknowledged what Northwest Indiana lawmakers would not: Any attempt to relocate one of Gary's lakefront casinos within the city almost certainly means the Steel City's second casino and its license go dormant until it can be moved elsewhere, probably outside the city if not the region.

"I thought it was kind of common knowledge," the Republican governor told reporters. "Some time ago (Gary legislators) came in -- this idea has been out there -- (and said) that you might go to one (Gary casino), put it in a place that attracts more business than the two combined do now."

Daniels said the casino relocation, which stalled on the final day of the legislative session, would "take one license out of play, at least initially."

The General Assembly is headed to special session after failing to approve a new state budget, so the plan could find new life in coming weeks.

"We were very, very close," Rep. Charlie Brown, D-Gary, said Friday. "Believe you me, it will come up again."

Region lawmakers advocate moving one of Gary's lakefront casino licenses to the Little Calumet River or to a land-based facility near the intersection of Interstate 65 and the Borman Expressway. Supporters are counting on a resulting spike in wagering taxes to finance bonds to build a teaching and trauma hospital in Gary, extend South Shore commuter rail lines to Lowell and Valparaiso, and redevelop the Lake Michigan shoreline.

But a Times analysis of state gaming figures found that just moving a casino within Gary would not generate nearly enough revenue to finance all three projects.

The two adjacent Majestic Star Casinos in Gary's Buffington Harbor paid $58.7 million in wagering taxes last year on $245.6 million in revenues, and they are on pace for a 10 percent decline this year.

If a consolidated Gary casino attracted the same level of business it would pay $11 million more a year in taxes under the state's graduated wagering tax rates. That's roughly a third of what region legislators have said would be needed to finance $350 million in debt for the South Shore expansion alone.

The Gary hospital project carries a similar price tag.

The deal has a better chance of working if Gary's second casino license is put on the auction block, which might attract a one-time sum of about $250 million. That was the price horse racing tracks in Anderson and Shelbyville paid the state in 2007 for the right to install slot machines.

Fort Wayne officials previously expressed interest in obtaining one of the Gary casino licenses. But Senate President David Long, R-Fort Wayne, insisted the Gary casino move doesn't belong in the special session mix after it helped derail a budget deal last week.

"They were trying to force some sort of a deal on it," Long said of Lake County legislators. "But the fact of the matter is gambling and the 2009-2011 budget aren't going to be simpatico, alright. (We're) going to worry about getting a budget we can live with. Issues with gambling and whose running the boats do not belong in this budget."

A Times analysis of state gaming figures found that moving a casino within Gary would generate about $11 million a year -- not nearly enough to finance construction of a teaching hospital in Gary, redevelop the Lake Michigan shoreline and extend South Shore commuter rail lines to Lowell and Valparaiso.