Study panel outlines options to keep gambling competitive

Allowing riverboat casinos to relocate inland is among options that would help protect Indiana casinos from competition
from neighboring states, according to findings of a study released by a legislative panel Tuesday.

The Gaming Study
Committee’s report also concluded that the city of Gary and the state could be best served by allowing one of two Gary casinos
on Lake Michigan to become land-based. Proponents say an inland casino at a major intersection of interstates in the city
would draw more customers.

The remaining Gary riverboat license would be returned to the Indiana Gaming Commission.

"As in any other industry, particularly those that cater to retail consumers, it’s all about location,"
said Sen. Luke Kenley of Noblesville, the Republican co-chairman of the study committee. "We think their ability to go
to a better location would increase their volume and the amount of business they could do."

Kenley stressed
that the findings were not legislative recommendations. But they could serve as the basis for several gambling bills to be
considered when the full General Assembly convenes in January.

Among other findings:

— If riverboat
casinos are allowed to relocate inland, they should pay a fee to the state.

— Expanding gambling to new cities
or counties is not in the best interest of the state or the industry.

— There is no compelling reason to
alter the structure of riverboat wagering taxes.

— Requiring casinos at the state’s two pari-mutuel horse
tracks to pay taxes on revenue paid to the racing industry and purses for breed development is an undue burden.

—
Requiring riverboat casinos to have marine navigational systems harms their ability to compete.

The committee has
spent several weeks studying gambling issues, in large part because of gambling expansions or proposed expansions in Illinois,
Kentucky and Ohio.

Ohio voters approved a ballot issue last month to allow one casino each in Cincinnati, Cleveland,
Columbus and Toledo.

An analysis by the Indiana Legislative Services Agency, the General Assembly’s nonpartisan
research arm, predicts three casinos in southeastern Indiana — which rely heavily on patrons from the Cincinnati area
— would be hit the hardest by the new competition.

The Hollywood Casino in Lawrenceburg, Grand Victoria Casino
in Rising Sun and Belterra Casino near Vevay — all downstream from Cincinnati — could lose 38 percent of admissions
and $260 million in gambling revenues in the first year after the Ohio casinos open, amounting to a $93 million cut in the
taxes they pay, according to the analysis.

Hoosier Park’s casino in Anderson, about 25 miles northeast of Indianapolis,
would lose gambling customers to a new Toledo casino, costing the state another $9 million, it said.

A new casino
in the Chicago area is planned, as are more tribal casinos in Michigan.

And Kentucky Gov. Steve Beshear wants to
legalize either slot machines or casino-style gambling at racetracks throughout his state. Michigan has more than 20 tribal
casinos and proposals for more.

Kenley said Indiana’s casinos were a legitimate, highly regulated industry that
employ about 16,000 people and pay about $800 million in taxes to the state and another $300 million to local governments
and entities.

The Casino Association of Indiana was hoping the committee would give a positive nod to tax breaks
for new casino development and promotions designed to draw more customers. But they weren’t included in the findings.

Mike Smith, the association’s executive director, said his group realizes that considering dwindling state revenues, it
would have been difficult for the committee to take a position on such tax breaks.

But he said the report opens
the door "for looking down the road" when the economy improves to consider such proposals.