« Ind. Decisions - Still more re "Inmates' sexual romps not a crime" | Main | Courts - Sex offender laws before several courts »

Thursday, November 05, 2009

Ind. Gov't - Still more on: "State no longer holds all cards"

On Sept. 13th Niki Kelly of the Fort Wayne Journal Gazette had a lengthy story on what l noted in this ILB entry:

looks to be an interstate "gambling race," oddly paralleling the intercontinental nuclear arms races during the cold war, but with no way out.
Kelly's story began:
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.

This entry the next day quoted from a NY Times story that in turned quoted from a new report:
The data shows that states take a real chance in depending on gambling because this revenue is not likely to keep pace with growing budgetary needs,” said Lucy Dadayan, a senior analyst at the Nelson A. Rockefeller Institute of Government at the State University at Albany, which will release a report on the subject next week.
The 20-page report is now out, it is available here, titled "For the First Time, a Smaller Jackpot: Trends in State Revenues from Gambling."

Yesterday, Lesley Stedman Weidenbener and Tom Loftus of the Louisville Courier Journal had a long story headlined "Ohio casino vote stirs sense of urgency in Kentucky, Indiana." Some quotes:

Top officials in Kentucky and Indiana urged quick action Wednesday to protect their states’ interests in response to Tuesday’s decision by Ohio voters to authorize casino gambling.

Kentucky Gov. Steve Beshear joined horse racing leaders in pushing lawmakers to move quickly to expand gambling, now that casino construction can move ahead in Cincinnati and three other Ohio cities. * * *

In Indiana, which could lose $100 million in tax revenue to new Ohio casinos, Senate Appropriations Committee Chairman Luke Kenley said the Ohio vote increases the urgency for Hoosier lawmakers to bolster the state’s casino industry and shield the taxes it generates.

“It will push us,” said Kenley, R-Noblesville. “The state gets a little over $800 million in taxes from casinos and local governments get $300 million. There’s going to be a desire to protect that revenue stream.”

The Hoosier gambling industry wants tax breaks to help expand, build new amenities or bolster promotions in advance of the projected 2012 opening date of the new downtown Cincinnati casino.

The new Ohio gambling venues — one each in Cincinnati, Columbus, Cleveland and Toledo — will be the state’s first foray into casinos, although the issue has been debated there for years. The proposed constitutional amendment — approved 53 percent to 47 percent — marked the fifth time that Ohio voters have considered gambling.

The Ohio legislature now has six months to pass casino development legislation. Groundbreaking is expected to begin in about a year, and barring major problems the four casinos could open in 2012. * * *

In Indiana, the new Cincinnati casino is expected to take a significant bite out of business at three Ohio River casinos: Hollywood at Lawrenceburg, Grand Victoria at Rising Sun and Belterra near Vevay.

A study by the Indiana Legislative Services Agency predicts the three southeastern Indiana casinos could lose as many as 38 percent of their customers and as much as $260 million of their $680 million in annual wagering revenue to the operations in Cincinnati and Columbus.

In all, Indiana could lose $100 million in annual tax revenue to the Ohio casinos — about one-ninth of its annual take from 13 casinos.

“It’s a big, big chunk of the tax dollars that Indiana receives,” said Ernest Yelton, executive director of the Indiana Gaming Commission.

Indiana legislators already have been studying how best to protect the state’s wagering tax revenue and help the casinos weather competition not just from Ohio, but from planned or proposed new gambling venues in Michigan and Illinois.

Casino owners have urged a number of possible options, including new tax breaks and the elimination of rules that force many of the casinos to be located on water.

“We have to make sure the state gives us all the tools we need to be competitive,” said Mike Smith, executive director of the Casino Association of Indiana.

Lawmakers should strive to help Indiana’s casinos become regional destinations with amenities including spas, golf courses and high-end restaurants and shops, Smith said. That can be achieved through tax breaks that encourage national gambling companies to invest their capital in Indiana rather than other states, he said.

Kenley said the challenge will be determining how to help casinos facing significant out-of-state competition while not harming other in-state gambling operations.

"High stakes for Indiana casinos: The state's gaming industry must adapt quickly to a new reality: competition from Ohio," is the heading to Bill Ruthhart's long story today in the Indianapolis Star. It begins:
Ohio voters' decision Tuesday to legalize casinos will hit Indiana where it hurts: the wallet.

Four Hoosier casinos could lose nearly $300 million a year from the added Ohio competition. The state stands to lose as much as $103 million in taxes, and the communities that will lose gambling visitors already are preparing for smaller budgets and belt-tightening.

"I was really hoping this wouldn't pass in Ohio," said Bill Marksberry, mayor of Rising Sun, the small southeastern Indiana city where the Grand Victoria Casino is located. "We're going to have to buckle down and do whatever we can to keep people coming here."

The forecasts aren't encouraging.

A study of casinos in Indiana by the state's Legislative Services Agency predicts that three casinos in southeastern Indiana -- Grand Victoria Casino, Belterra Casino near Vevay and Hollywood Casino in Lawrenceburg -- will lose 30 percent to 38 percent of their customers, resulting in a total revenue loss of $202 million to $260 million a year.

Anderson's Hoosier Park Racing & Casino would lose 14 percent of its customers and $28 million a year in revenue, according to the projections.

"There is definitely reason for concern," said Ernie Yelton, executive director of the Indiana Gaming Commission, which regulates casinos.

"If there's any silver lining here, it's that there's time to adjust."

It will be at least 2012 before any of the Ohio casinos would open on their downtown parcels in Cincinnati, Cleveland, Columbus and Toledo. Indiana's casino operators said that time should be used by state lawmakers to approve measures -- such as land-based casinos and tax breaks -- that would allow them to become more competitive.

"I'd say everything is on the table right now," said Sen. Luke Kenley, R-Noblesville, a key fiscal leader who serves as chairman of a gambling study committee.

"In my mind, what's happened in Ohio creates a sense of urgency."

Here is the 24-page Oct. 19, 2009 LSA report mentioned in the two stories: "Estimates of the Fiscal Impacts from Out-of-State Casino Competition and Movement of Casino Licenses in Indiana."

Posted by Marcia Oddi on November 5, 2009 10:22 AM
Posted to Indiana Government