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Sunday, September 13, 2009

Ind. Gov't - "State no longer holds all cards"

Niki Kelly of the Fort Wayne Journal Gazette has a lengthy (and oddly unparagraphed) story today on what looks to be an interstate "gambling race," oddly paralleling the intercontinental nuclear arms races during the cold war, but with no way out. Some quotes:

INDIANAPOLIS – Sixteen years ago, Indiana ventured into casino gambling for the first time, banking on the idea that riverboats in border communities would spur economic development and fill tax coffers.

But now, surrounding states are catching up. Ohio will have horse tracks with video slots next year, and Michigan is adding tribal casinos.

It’s a threat to the nearly $1.1 billion a year in tax revenue the state reaps, and has grown to depend on, from legalized gambling.

“In some respects we are playing defense, much more than we ever have,” said Mike Smith, president of the Casino Association of Indiana. “The state could wake up one day and find out that $300 million of their revenue is gone. It’s time to take a look at how we built this industry and make sure the tools are there to allow us to compete.”

More from the story:
“Most observers believe that at least in the state of Indiana, the market is saturated,” said Ernest Yelton, executive director of the Indiana Gaming Commission.

And the growing competition coming from neighboring states isn’t helping. Smith couldn’t even identify the biggest threat to the state, saying, “when you are surrounded, you can attack in any direction.” * * *

Yelton said it’s only a matter of time before Kentucky and Ohio get into the gambling business and that Indiana could face trouble when that happens. “For about two years now, I have tried to consistently inform legislature and administration that competition was looming and it was real and it was going to happen,” Yelton said. “It was just a question of when and what form it would take.” * * *

Bill Thompson, a professor of public administration of the University of Nevada Las Vegas, has studied the gambling industry for 30 years. He expects casino revenues to rebound when the economy does, but he said the Cincinnati-Louisville market is probably tapped out for growth. Interestingly, he said Fort Wayne development is needed to protect existing state revenue. “You have to be mindful that Ohio is ready to open casinos in Toledo, and the Battle Creek casino is reaching into Indiana,” Thompson said. “So Fort Wayne is a defensive move to keep the money from going to Michigan and Ohio, but not a growth area.” * * *

Yelton said. “We might gain in Fort Wayne but you will lose elsewhere.” And a Fort Wayne casino would be another example of relying on Hoosiers to gamble their own money. When the riverboats were first envisioned, they were placed on the borders to attract out-of-state gamblers.

Posted by Marcia Oddi on September 13, 2009 10:24 AM
Posted to Indiana Government