Gambling debate hinges on ‘expansion’ definition

Whether Indiana expands gambling next year is likely to hinge on how Republican Gov. Mike Pence and state lawmakers define an expansion.

House Public Policy Chairman Tom Dermody, R-LaPorte, opened a gambling hearing last week with a word of caution for his colleagues: Before they launch into the 2015 session in January, they need to decide what they consider an expansion to be.

"I believe the goal has to be to recommend something leading into session and be able to justify why it is not an expansion of gaming," Dermody said.

Dermody's comments offer a clear nod to Pence, who has said he opposes any expansion but won't say what that means.

The state's riverboat casinos and two racetracks with slots have long pushed, respectively, to move their operations on land and add table games. Industry executives and lobbyists made the same case again at last week's hearing amid a continuing decline in profits for both them, and the state.

On the surface, Pence appears to have taken a clear stance against an expansion. But when what he considers "expansion," he would not provide examples.

"I've made it very clear from the beginning that gaming is a reality in the state of Indiana. It's never been the intention of my administration to promote policies that either expand or contract gaming in our state," Pence said. "But I'm going to make it very clear to legislators that our administration will not support any expansion of gaming in the state of Indiana."

Whether the governor would support expanding racetrack operations to allow table games or bringing the casinos on land remains to be seen. When the issue was broached in 2013, during his first few months in office, Pence supported a legislative compromise that allowed the casinos to deduct up to $5 million from the amount paid annually on admission taxes.

Behind the scenes, observers have seen Pence's decision to change the lobbyists who handle the gambling issue for him as a sign that he is seeking some sort of answer to the problem next year.

Since riverboat casinos were first legalized in 1993, limits on their operation have been peeled away periodically. In 2002, they were no longer required to cruise the Ohio River and Lake Michigan, and in 2003 the state granted an exemption to build a casino in French Lick.

In 2008, lawmakers legalized slot machines at the two racetracks; shortly after that, the state gaming commission approved electronic games mimicking tables games, like blackjack and poker, at the facilities.

"Indiana has expanded gaming, time and time again," said Rep. Matt Lehman, R-Berne.

He later paraphrased the industry's explanations for each expansion: "'We're going to move them to the dock, that's not an expansion of gambling.' 'Well, we're going to move them on land, that's not an expansion, we're just moving them on land.'"

But momentum has been building at the Statehouse for some sort of expansion — or at least changes that increase spending, and tax collections. As neighboring states have added slots and casinos in the past few years, Indiana's gambling revenue has plummeted, and state tax collections have faltered as a result.

Lawmakers representing areas with gambling operations frequently point out that the casinos and "racinos" have brought well-paying jobs to economically depressed regions.

Whatever answer Indiana's leaders agree on next year, it is more than likely to expand operations and increase spending without ever mentioning the word "expansion."