Lawmakers are working to address the decline in revenue from Indiana casinos and the entities they pay taxes to, but the move could hurt local governments.
Evansville is among Indiana cities that could lose a collective $18 million from the state government if House Bill 1350 passes. Currently, the state pays $48 million to help supplement the money local governments receive from their casino's admissions taxes, but as taxes have declined, the burden on the state's general fund has increased.
According to the Casino Association of Indiana, the statewide gross gaming revenue from September 2015 to 2016 was 21 percent below its peak in 2008. Competition is only expected to increase with the opening of the South Bend casino and an increase in gaming of neighboring states.
Rep. Todd Huston, R-Fishers, emphasized he didn't want the bill to negatively impact local governments, and he is willing to amend the bill to work towards a solution for everyone.
"This bill is not a final product," Huston said. "We will continue to talk and have conversations. We certainly don’t want to hurt local communities.”
Evansville Mayor Lloyd Winnecke met with Huston on Thursday to discuss concerns with the legislation. While Evansville doesn't depend on gaming money in its general budget, the city uses it for capital investments, such as purchasing police cars, firetrucks and snowplows.
Winnecke said there are always more requests than the city can fund for capital investments, even with casino tax money. So less money in the capital fund means fewer departments get items from their wish list.
Other communities might see a bigger impact because their gaming dollars go directly to the general fund.
"Gaming money is extraordinarily important for the city of Evansville," Winnecke said. "Because we have gaming money, it relieves pressure from the general fund and other revenue streams… Without it, it would be really, really challenging."
John Chaszar, Tropicana Evansville's general manager, said their intentions aren't to harm the city, and the expansion of Tropicana Evansville onto land might make up for some of the loss.
"We’re never looking for a tax cut from the city of Evansville," Chaszar said. "We have a wonderful relationship."
The state wouldn't reap the benefits of the money saved, because of other taxing areas the bill adjusts. The bill allows casinos to deduct gaming taxes from their corporate taxes, so they aren't essentially being taxed twice.
The bill would also remove a $3 admissions tax on every person that enters the land-based gaming floor, and instead tack on a 3 percent tax on gaming revenue. Right now, even if a person just crosses the gaming floor, casinos have to pay a $3 tax for that person. The result means casino owners are more reluctant to build additional restaurants and other facilities directly next to the gaming floor.
"As you can imagine, when you build a facility like that, your intent is to make it appealing for all people, not just people who are there to wager," Huston said. "I think (the admission tax) disincentivizes the investments we would all like to see in this industry to make sure that they attract both the person who wants to gamble and the non-gambler."
The change from a per-person fee to a percentage of gaming revenue would likely not impact the collective amount of taxes paid from casinos, though individual casinos would have to pay more or less than they do now depending on how much revenue they bring in.
Chaszar said in 2016, Tropicana Evansville paid admission taxes equivalent to 2.75 percent of its revenue. So with the change in how taxes are collected, they'd likely be paying more money than before.
However, he is banking on the move to land to boost admission and revenue.
"It is worrisome that it would be a tax increase, but we also recognize and appreciate the bind Rep. Huston is in in trying to balance the budget," Chaszar said. "It's recognizing we have to modernize how we do things in the casino industry."