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Bill allowing sports betting, casino moves passes General Assembly

April 25, 2019

Get ready to place your bets.

The Indiana General Assembly approved legislation Wednesday night that allows Hoosiers to place wagers on professional and college sports as soon as Sept. 1. The legislation heads to Gov. Eric Holcomb, who can sign it into law, veto it or let it become law without his signature.

The legislation — House Enrolled Act 1015 — also accelerates the date when horse-track casinos can introduce live-dealer table games from 2021 to Jan. 1, 2020; allows the owner of the two casinos in Gary to relocate one from Lake Michigan to a more convenient interstate location; and authorizes a Terre Haute casino to open if the Gary relocation takes place.

“This type of opportunity won’t come again in our lifetime, I don’t think,” said Sen. Mark Messmer, R-Jasper, who authored the original gambling bill — Senate Bill 552. The language was folded into HB 1015 earlier this week because of the tax issues involved.

The bill legalizes sports wagering for adults ages 21 and older as of Sept. 1 and implements a 9.5% tax rate on those wagers. The tax rate is higher than some states, such as Nevada and New Jersey, where the rates are 6.75% and 8.5%, respectively. But it’s lower than others such as Mississippi or West Virginia, where the rates are 12% and 10%.

Hoosiers will be able to place bets by using their smartphones or at a casino or off-track betting facility, such as Winner’s Circle in downtown Indianapolis, after registering online or at a casino or OTB.

Betting on e-sports or high school and other amateur youth sports is prohibited.

The bill does not require official league data to be used, but it does allow the Indiana Gaming Commission to consider establishing a rule that official league data be used for in-game bets — those made when a game is already in progress, not just on a contest’s outcome but on individual plays or in-play statistics.

The bill, which passed the House 59-36 and the Senate 37-12 with mixed support from Democrats and Republicans, remains largely unchanged from the version released by lawmakers Monday.

The biggest differences involved the maximum number of casinos and racinos one operator will be allowed control and which communities could receive some type of subsidy if they were hurt by casino shuffling.

The revised bill would now allow one operator to control as many as six casinos and racinos. Current law caps the number of licenses one individual or company can control at two, but previous drafts of the bill lifted the cap completely.

As for the subsidy provisions, that had been a big sticking point for lawmakers in certain areas of the state with casinos.

“I personally felt it was important to put it back in,” said Rep. Terri Austin, D-Anderson.

The final language provides subsidies to East Chicago, Hammond, Michigan City, Evansville and French Lick.

The $40 million tax credit proposed for Spectacle Entertainment, which acquired Majestic Star I and Majestic Star II in Gary earlier this year, was also dropped from the bill before passage.

The credit was meant to compensate Spectacle for giving up its second license to the state, which it would be required to do if it moves forward with plans to close its existing riverboats on Lake Michigan and build a $300 million casino along the Interstate 80/94 corridor in Gary.

Instead, the bill allows Spectacle to continue paying under its current tax structure with the two casino boats for four years, which lawmakers say would still benefit to the company.

“We’re just maintaining the current status and not offering a new benefit,” said Rep. Todd Huston, R-Fishers, who sponsored the legislation in the House but voted against the final bill.

Spectacle would have to pay a $20 million fee if it chooses to relocate the casino and another $20 million if it sells the new casino within five years. That’s much less than the originally suggested $100 million fee, a reduction that at least one Democratic state lawmaker was unhappy about.

“I don’t see that this is a good deal for the people of Indiana,” Rep. Ed DeLaney, D-Indianapolis, said. “I don’t see what’s in it for our taxpayers.”

The legislation requires a minimum investment of $150 million for the new Gary casino, which would be allowed to have 2,764 gaming positions — much more than the 1,684 positions now at the two Gary casinos combined.

If all of the gaming positions were utilized — and most casinos do not use all of the gaming positions allowed by the state — it would be the largest casino in Indiana, a fact that has drawn concern from other casino operators.

The fate of a casino in Terre Haute is also tied to the proposal in Gary.

If Spectacle opens the new Gary casino and surrenders the second license to the state, then the extra license can be used for a new casino in Vigo County, where Terre Haute is located. But if Spectacle does not move forward with those plans, a casino in Terre Haute would not be allowed.

If the Terre Haute license is allowed, potential casino operators would submit proposals to the Indiana Gaming Commission. The selected operator would have to pay a $5 million fee for the license — up slightly from the $2 million fee suggested Monday.

Spectacle, which has already expressed an interest in operating a casino in Terre Haute and has proposed opening a $100 million to $150 million facility, would be allowed to submit a proposal for the license and essentially re-obtain its old license.

The bill requires a minimum investment of $100 million in the Terre Haute casino, and the number of gaming positions would be capped at 1,500.

In addition, before a Terre Haute casino is allowed to move forward, voters in Vigo County would have to approve a referendum supporting it.

“This is a jobs bill for my area,” said Rep. Tonya Pfaff, D-Terre Haute. “It will have a lasting impact on my area of the state.”

If the Gary casinos are consolidated and a Terre Haute casino opens, the state would have 12 casinos and two horse track casinos.

The bill had mixed support among Democrats and Republicans. Rep. Ben Smaltz, R-Auburn, said he had multiple concerns with the legislation, especially mobile sports betting. He said he’s been wondering for months why they were even considering the bill.

“This is a monumental policy shift,” Smaltz said. “I’m not excited about it.”

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