Indiana Gambling Bill Awaits Holcomb Signature
Officials in Gary, Indiana are preparing for the move of the Majestic Star Casinos from Lake Michigan. One will be rebuilt as a land-based venue in downtown Gary. The other license would be put up for bid for a casino in Terre Haute in Vigo County if voters there approve it. Legislation allowing the move passed the legislature–37-12 in the Senate and 59-36 in the House. It now awaits the signature of Governor Eric Holcomb, who is expected to sign it. The bill also would legalize sports betting. Holcomb said, “My first and last thought is the impact it has on taxpayers and on our citizens, both short-term and long-term. I want to make sure the state of Indiana is the winner, and for me to be sure of that I have to read the bill word-for-word and I’m not there yet.”
Gary officials want to redevelop Buffington Harbor, where the casinos are located, into an intermodal transportation hub. “We’re extremely pleased,” said Gary Mayor Karen Freeman-Wilson. Spectacle Entertainment, owners of Majestic Star, would be required to pay a fee of $20 million to move the Gary operation ashore; but the legislation also gives the company a $40 million tax credit for surrendering one of its licenses for the Vigo County facility.
Keeler said once Holcomb signs the bill, the company will apply to the Indiana Gaming Commission for permission to relocate by the end of the year. “This could take some time,” he said. In addition, Spectacle will have to go through the regulatory process in Gary for rezoning.
Keeler said a site has been selected but he wouldn’t divulge its location. Nor would he reveal a timeframe for when ground would be broken. “We’ll move as fast as we can, but there are a lot of moving parts,” Keeler said. Under the plan, the new Gary casino can have up to 2,764 gambling games to match the maximum combined gaming positions offered at the two Majestic Star boats.
Freeman-Wilson said she believes groundbreaking for the new $300 million Gary casino could occur by the end of 2019. Keeler said the new casino would have a new name and brand, but those still are being discussed.
Meanwhile, according to John Keeler, vice president and general counsel at Spectacle Entertainment, operations will continue as usual at the two Majestic Star casinos until the new casino is ready. “When the casino does vacate, we’ll easily be ready to go into that space in short order,” Freeman-Wilson said.
Mayors of other regional cities have expressed their disappointment in the legislation, including Hammond Mayor Thomas McDermott Jr. who opposed the bill. Horseshoe Casino is located in Hammond. “I’m happy for Gary. At the end of the day, the governor and Gary prevailed.” The bill provides financial compensation if a new Gary operation affects casino revenue in Hammond, East Chicago or Michigan City.
David Strow, a spokesman for Blue Chip Casino in Michigan City, said, “We are disappointed in this legislation, which provides a single operator the ability to move to a much more desirable location, and does not provide that opportunity to any other operator in the state. Having said this, we remain confident in the future of Blue Chip, and in our ability to leverage our market-leading amenities and our talented team to compete effectively in the market.”
Keeler said Spectacle Entertainment would possibly offer jobs to workers at the area’s other three casinos who could lose their positions as a result of the new casino. “We thought we would need an additional 400 workers over and above the 800 workers now employed at the two Majestic Star casinos,” Keeler said.
The legislation also would move the other Majestic Casino license to Terre Haute in Vigo County, if voters there approve the move in a county-wide referendum to be held in November or the 2020 spring primary. If voters approve a casino, the Indiana Gaming Commission would begin accepting applications from potential operators and checking backgrounds. “We will definitely be interested,” Keeler said. The successful applicant would pay a $5 million license fee. The new operator also would be required to pay Evansville “hold harmless” money for three years after the casino’s first year of operation. Payments of $1.2 million would be due within the first year of operation, $900,000 in the second year and $600,000 in the third.
Terre Haute Mayor Duke Bennett said, “In Terre Haute we’re looking at a $100 million investment, 500 construction jobs and 300 to 400 new jobs with the casino. And so it’s not only putting these people to work, but it’s got long-term benefits with revenue that’s going to come in and help us do quality-of-life projects.”
The newly passed measure also would legalize betting on professional and collegiate sporting events at casinos, racinos and off-track betting parlors—in person and via mobile. Players must be at least 21 years old and betting on players under age 18 would be prohibited. Operators would pay a $100,000 initial fee with an annual renewal of $50,000. Revenue would be taxed at 9.5 percent, with a percentage going to problem gambling services.
A study from the Legislative Services agency indicated sports betting in Indiana could generate more than $10 million in tax revenue in 2020.
State Senator Jon Ford, one of the bill’s sponsors, added, “Some people want to call it an expansion but we saw it as more of a reorganization. We haven’t changed much in gaming in 27 years and the gaming industry has changed a lot around us. More neighboring states are now offering gaming than they were 27 years ago, and so we felt we needed to modernize gaming in the state, and I feel we did. Throughout the process we’ve had to deal with the regions that have existing casinos and the risk that what we were doing would negatively affect them. Navigating through all those all those complicated discussions was definitely time consuming.”