Local leaders plan pitch for downtown casino, circle potential sites

Indianapolis elected officials are considering a big gamble at the Statehouse next year on efforts to land a casino license for downtown, with hopes that tax revenue from gambling could help fund investments in the city’s sports and tourism ecosystem.

While still in its infancy publicly, a push to urge the Legislature to assign a casino license to Indianapolis has been debated behind closed doors over the past several months. Sources told IBJ that the effort generally has support from the Hogsett administration as well as a bipartisan group of Indianapolis lawmakers.

But at least one key legislative leader—House Speaker Todd Huston, R-Fishers—told IBJ he doesn’t think central Indiana needs another casino.

His comments come just days after a state-commissioned study found that downtown Indianapolis offered the best opportunity for additional revenue from a casino. The study found northeast Indiana to be the second most lucrative location.

The analysis, conducted by Philadelphia-based Spectrum Gaming Group, said that relocating an existing casino to the state capital would generate an estimated $170 million in gambling tax revenue each year and more than $490 million in estimated gross annual revenue.

IBJ sources, who spoke on the condition of anonymity, said both Indianapolis Mayor Joe Hogsett and his Chief of Staff Dan Parker have been involved in conversations about a downtown casino, some with state lawmakers including Indianapolis Republican Sen. Aaron Freeman.

In a statement, a spokesperson for Hogsett confirmed that officials have “been in discussions on this subject since the end of the legislative session” in April and were unsurprised by the study’s findings about the potential impact of a casino in Indianapolis.

“The city will continue to engage community stakeholders and assess the viability of this potential development and will remain in conversations with the Indiana General Assembly should they decide to move this proposal forward,” the statement said.

Hot spots

Three sources told IBJ that there have already been some discussions about where such a project might be located, with two sites near the Indiana Convention Center at the top of the list.

The individuals, who spoke on the condition of anonymity, independently confirmed that those sites consist of 6 acres of parking lots along South Street, between the Indiana Convention Center and Lucas Oil Stadium, and a portion of Pan Am Plaza that will not be used for Signia hotel and convention center expansion, which are now under construction.

A casino on the lots south of the convention center and north of Lucas Oil Stadium would likely require collaboration between the state and the Capital Improvement Board of Marion County, as each own a portion of that land. Still, that site is the larger of the two under consideration and would be more conducive to a casino. That’s because most of Indiana’s casinos have gaming floors that range from 31,000 to more than 200,000 square feet, all on one level.

The Pan Am Plaza site could offer two possibilities, including the southeast portion of the site, which had been earmarked for a 600-room Hilton hotel that has been indefinitely delayed. The other less likely option, sources told IBJ, would be to demolish the 12-story Pan Am Tower, which is owned by the CIB, and replace it with a casino.

Local officials and state lawmakers have also floated other possible sites, including Union Station and the land where the United States Postal Service facility is located just east of Lucas Oil Stadium. But several sources told IBJ that each of those sites presents challenges. In the case of Union Station, its size and historic architecture could pose problems, while the owner of the USPS facility has expressed little appetite in making a deal.

Another IBJ source close to the deal said that while multiple sites have been considered, “it is far too early” to say that any  property has been chosen for such a project. The person also said a casino downtown remains a long-shot proposition.

The renewed conversation comes amid a push by Full House Resorts to relocate its Rising Star Casino in Ohio County. The Las Vegas-based company lobbied state lawmakers last session to be allowed to move its gambling license from along the Ohio River to the Fort Wayne suburb of New Haven, where it planned to build a $500 million casino along Interstate 469.

Moving a license to the Fort Wayne area could yield $61 million in taxes per year and $204 million in gross annual revenue, according to the Spectrum study.

The New Haven proposal faced opposition from lawmakers and residents in the area and ultimately died in a legislative committee without a vote. However, lawmakers approved a study to determine where a relocated casino could be most successful.

In 2015, Full House sought to move its license to the Indianapolis International Airport as part of a proposed $650 million upscale retail center and casino. But that idea died after opposition from the Indianapolis Airport Authority as well as casino operators in Anderson and Shelbyville, who have in the past opposed proposals to bring additional gambling venues to the Indianapolis area.

Challenges ahead

Freeman, the state senator, said Full House should be allowed to move its casino license given that Rising Star’s revenue is among the lowest in the state. But he said the discussion about casino licenses shouldn’t be limited to only the Rising Str license. He said Full House could put a casino in northeast Indiana, and the state could authorize a new casino license for Indianapolis.

“If the goal of our gaming operation is revenue to the state of Indiana, it is an abject failure that there is not a casino in downtown Indianapolis,” Freeman said. “We need a casino in downtown Indianapolis.”

Typically, when the Legislature creates a new casino license, the Indiana Gaming Commission accepts bids or development proposals and then chooses the one that could most benefit the region and state.

Democratic State Sen. Greg Taylor has previously signaled his support for a downtown casino, although a representative for Taylor did not return a call requesting comment.

State Rep. Greg Porter, an Indianapolis Democrat, said he’s also interested in the possibility of a casino downtown. But he said it’s hard to know whether the Republican-controlled General Assembly would consider putting a casino license in Indianapolis, especially one supported by the city’s Democratic leadership.

He said lawmakers at the Statehouse on West Market Street are “always trying to regulate what happens on East Market Street,” a reference to the City-County Building. “This is gonna be a long process,” Porter said.

In a Sunday statement through a spokesperson, House Speaker Todd Huston, R-Fishers, said he didn’t see a reason to provide a license for a downtown casino.

“I believe the Indianapolis market is already adequately served by the current gaming facilities,” said Huston, whose district in part sits directly west of Anderson, which is home to the Harrah’s Hoosier Park Racing & Casino. “I do support exploring a new gaming license in northeast Indiana and the economic development opportunities it could bring to the region.”

Uptick in funding

But Freeman and other local leaders say there’s plenty of upside for the Legislature to at least consider giving Indianapolis a hard look.

“This could very much help the city of Indianapolis and the CIB,” Freeman said, referring to the Capital Improvement Board, which operates the convention center, Lucas Oil Stadium and other downtown facilities.

“We’re not far away from having to talk about the Colts staying in Indianapolis—we’re going to need revenue,” Freeman said. “Our city needs money, and I think the state partnering with the city could do a lot of good here.”

The Indianapolis Colts organization is expected to begin talking with city and state officials soon about upgrades to Lucas Oil Stadium as part of negotiating a new lease agreement.

The city is also continuing to push for state funding for a proposed soccer-first outdoor stadium on the east side of downtown that would be owned by the Capital Improvement Board.

But with budget cuts and other financial challenges facing both the state and its municipalities, scraping together money for those kinds of projects could be a tough sell. A new casino that generated state and local tax revenue could solve that problem, sources said.

In a statement, a spokesperson for the CIB said the agency considers the possibility of a downtown casino “an intriguing idea” that could contribute to the growth of the city’s tourism and convention industry.

“We’re very interested in the direction that the Legislature is going to take armed with this current information,” the statement said.

For its part, Visit Indy—the nonprofit that helps attract tourists and conventions to the city—has not landed on its public position about a casino. Chris Gahl executive vice president of the tourism agency, said that it will consider the matter during its board’s executive committee meeting Nov. 19.

“The Visit Indy executive committee of our board also serves as our policy committee, helping our nonprofit think through when and where we take public positions,” Gahl said. “Over the last 20 years, this idea has surfaced a handful of times, and each time we’ve had a healthy discussion.”