Two proposed Indiana House bills are waiting in the wings to help casinos counter pressure faced by competition from neighboring states.
"Gaming is our third biggest revenue to the budget," State Rep. Sean Eberhart, R-Shelbyville, said. "So it is an important issue and these two bills are an attempt to help us in that regard. Both these bills certainly benefit the Shelbyville racino and both will actually benefit every gaming facility we have in the state."
Eberhart co-authored a bill addressing the double taxation practice casinos pay on vouchers issued as complimentary instruments to customers. The money casinos give to players for free play has already been taxed. Under current law it is taxed again when the customer utilizes the voucher.
"That needs to be corrected and it puts casinos at a disadvantage with our neighboring states," Eberhart said. "Most, if not all of our neighboring states, allow exception on that and don't double tax."
At a time when Indiana's casinos are staving off competition from Michigan, Illinois, Kentucky and Ohio, the removal of the double tax would be a welcome relief.
"We are one of the few states in the nation that is taxed this way," Centaur and Hoosier Park President and Chief Operating Officer Jim Brown said.
Centaur Gaming LLC, which owns Hoosier Park Racing and Casino in Anderson, is nearing the completion of its acquisition of Indiana Grand Casino and Indiana Downs in Shelbyville for $500 million.
Removing the tax will help put Centaur, and all Indiana gaming facilities, on a level playing field with neighboring states, such as Ohio, which does not double tax replay.
"It allows us to be more liberal in providing our customers free casino play and staying as competitive as possible with out-of-state competition," Brown said.
There is some concern the removal of the tax will further erode much-needed revenues from Indiana's gaming industry. It is estimated the provision is the predominant factor that could cost the state as much as $231 million in 2014 and 2015, according to a Legislative Services Agency analysis.
Eberhart doesn't deny initially the reduction will impact the state's revenue.
"But I feel like it will be a net positive in the end," he said. "One that's going to help us stabilize the revenue that we have now, help retain the customers that we have and avoid additional losses and potential losses in the future."
Eberhart is awaiting word from House Public Policy Committee Chairman Bill Davis if the bill will be granted a hearing.
A bill authored by Eberhart is essentially a companion bill to a Senate bill unanimously passed by the Senate Public Policy Committee in late January that now will move to the Appropriations Committee. Eberhart's bill will only be heard in the House if the Senate bill doesn't make it to the Senate floor or fails to pass.
The bill has several components to it, including the complementary play tax, an admission tax component affecting riverboats and a French Lick casino and the inclusion of table games at the two racinos which would be taxed at a lower rate.
The latter is relevant to Shelbyville and Anderson, as both racinos do not have live table games.
"This is going to bring a whole other set of customers, a whole other stream of revenue to racinos," Eberhart said. "It's a substantial amount."
Brown said Hoosier Park has all table games in electronic formats, but having live table games would create more than 700 new jobs at the Anderson and Shelbyville racinos.
"From our customer standpoint there is a high consensus that our folks would love live table games," Brown said.
Ed Feigenbaum, publisher of the Indiana Gaming Insight newsletter, said while electronic table games such as those operated at the two racinos cut down on overhead and appeal to some novice players who prefer the no-pressure "video virtual dealers" to the faster-paced environment offered by live dealers, live table games appeal to players who are more likely to spend more per trip.
"Win per slot per day ranges around $270 to $285 at the average property in any given month," he said. "While win per table per day generally is about $1,200 to $1,500 on the average statewide in any given month."
However, he said there can be considerable variances between properties in the averages.
Eberhart said the live gaming table provision is the only positive revenue-producing part of this bill, which is important because it will help offset the other provisions that will take money away from the state.
"This is huge for Shelbyville and Anderson," he said. "We have a changeover in ownership coming and they really want to invest in our facility," he said of Centaur.
Eberhart said both bills are addressing concerns that the gaming industry and legislators have known about for several years.
"We've known Ohio was going to expand into gaming, we knew expansion in Michigan with Indian-based casinos was going to continue and happen in Illinois as well," he said, adding that over the years the gaming industry had pleaded with lawmakers to be proactive.
"This is nothing new and, in fact, I think we've waited too long to address it," he said.
"Early on, most lawmakers did not want to get involved," Feigenbaum said. "And more recently, it has been difficult to find the 'sweet spot' needed to pass anything significant given that many of the proposals split the assorted casinos and some of the tax change proposals would reduce state revenue in the short-run (particularly at times when state revenues had been seriously depressed)."
What tipped the scale was the big hit on the revenue stream, Eberhart said.
"When you start to see the money go, that's when people take notice," he said.
It's not just about revenue for the state, Eberhart said thousands of jobs and a lot of money shared with local communities, including Shelbyville, are at risk.
"This would be devastating if we have a collapse of our industry," he said.
Copyright © 2024 The Shelbyville News