Lawmakers expand casino tax-break bill-WEB ONLY

A House bill that would have provided temporary tax breaks to three Indiana gambling venues was expanded last night to include all 11 riverboat casinos and two pari-mutuel horse tracks in the state.

According to the Louisville Courier-Journal, House Bill 1729 would lower tax rates for the state’s two racinos and allow the state’s riverboat casinos to deduct some of the dollars they spend on promotions from taxable winnings.

The original bill was designed to give tax breaks on wagering revenue to Blue Chip Casino in Michigan City, and to racinos at Hoosier Park in Anderson and Indiana Live in Shelbyville.

Blue Chip’s business has been hit hard by competition from a Native American-operated gambling venue in nearby New Buffalo, Mich. The racinos are struggling to pay debt brought on by huge startup costs.

The House amended the bill to expand the promotional tax break to all of the casinos and limit the deductions to the next four years instead of five. The deduction was capped at $5 million per year.

The original bill was approved 17-7 by the House Ways and Means Committee.

Advocates said the casinos are struggling and need help to stay in business. Critics said many other businesses in the state are facing hard times in the sagging economy, and it is not fair to single out the casinos for special favor.
 
The General Assembly passed legislation in 2007 allowing Hoosier Park and Indiana Live – then called Indiana Downs – 2,000 slot machines each at their pari-mutuel venues.
 
Track officials said revenue from the slots was needed to keep their tracks and the horse racing in Indiana viable, and they agreed to pay $250 million each over two years to get the slots, as well as spend at least $100 million each to build the new casinos. The state imposed a graduated tax on revenue from slots at the so-called “racinos,” which opened last summer.
 
Under the bill, tax rates on the slot revenue at the tracks would be cut 5 percentage points for each of the next four years.

John Keeler, a lobbyist for Hoosier Park, said its parent company, locally based Centaur LLC, was under severe financial distress and was paying high interest for loans it obtained to pay the slot-licensing fees. He also said the track and the state had misjudged revenue projections from the slots.
 
“Quite frankly, the tracks blew it and so did the state,” he said.
 
The bill would provide a $15 million tax deduction to Blue Chip, according to Democratic Rep. Scott Pelath of Michigan City, the bill’s author.
 
Blue Chip’s business has taken a hit since the opening in August 2007 of the Four Winds casino, which is about 10 miles from Blue Chip and is owned by the Pokagon Band of Potawatomi Indians. Blue Chip saw its monthly revenue fall from $26.7 million in July 2007 to $16.1 million a year later – a decline of nearly 40 percent.
 
Ryan Soultz, a lobbyist representing Blue Chip, said the tax deductions would allow the casino to enhance its marketing efforts and draw more customers.
 
Several lawmakers who voted for the original bill said they did so with reservations, but said casino revenue was important to the state – especially during this recession – and they wanted to keep the bill alive in some form.