Rising Star Casino in Rising Sun
(Lawrenceburg, Ind.) – If passed in its current form, Senate Bill 528 would have a negative impact on southeast Indiana’s casinos, as well as the governments and organizations who depend on casino tax revenues, a new report argues.
SB 528 is pitched by supporters as an expansion of gaming and a change for the better in the way casinos are taxed. The purspose, in theory, is to make Indiana’s 13 gaming facilities more competitive with a growing number of out of state rivals.
The legislation passed the Indiana Senate on February 25. It is now being considered in the Indiana House where it may face a tougher challenge. The bill currently resides in the House Public Policy Committee.
The Southeast Indiana Growth Alliance is an organization – representing Ripley, Franklin, Dearborn, Ohio and Switzerland Counties, as well as the City of Batesville – promoting the region to businesses for economic development and job attraction. SIGA released a report to the area’s elected leaders this week titled “Southeast Indiana's Casino Industry: New Competition vs. New Legislation (Which One Is The Real Threat?).”
“There are things in this report that seem very central to the debate but I have not yet heard them mentioned at the Statehouse,” said Jon Bond, President of the Switzerland County Economic Development Corporation.
The report asks Indiana lawmakers considering voting for SB 528 to rethink the tax relief and credits it would provide to gaming companies. According to the SIGA report, over half of Indiana's casino operators own or are pursuing properties in a neighboring state.
Each southeast Indiana riverboat could be a case in point. Hollywood Casino Lawrenceburg parent company Penn National Gaming operates casinos in Toledo and Columbus. Rising Star Casino in Rising Sun owner Full House Resorts has a project pending at the Thunder Ridge harness horse racing track in central Kentucky. Pinnacle Entertainment, owner of Belterra Casino in Switzerland County, also operates River Downs Racetrack east of Cincinnati.
“Who the competition is should be taken into account anytime our leaders are considering tax incentives. It should be looked at even closer when the group getting the incentive owns the competition,” the report said.
What is even more alarming is how much money Indiana casino operators are spending, or intend to spend, in Ohio. According to the report, Penn National Gaming, Pinnacle Entertainment, and Caesar’s Entertainment – the operator of casinos in Harrison and Hammond, Indiana – are investing a projected $2.1 billion in Ohio.
Caeser’s investment includes the newly opened Horseshoe Casino in Cincinnati.
SIGA urges lawmakers to not forget that local level management at casinos are not the final decision makers.
“These decisions will be made by a national (or international) corporation that views our local casino as one of large group of properties it owns.”
SB 528 would pit Indiana’s casinos against one another more so than today by allowing the state’s two horsetrack racinos in Anderson and Shelbyville to have live table games. The SIGA report cites an Indiana Legislative Services agency estimation that racino earnings could increase by $63 million per year with the change, largely at the expense of southeast Indiana’s riverboats.
Cities and counties which harbor casinos may stand to lose the most in the SB 528 battle. In its current form, the legislation would eliminate the admission tax that casinos pay to the state. A 2002 “hold harmless” agreement securing at least $40 million in state payments to casino communities from the admissions tax would be trashed. The money would be put towards up to $40 in annual tax credits for casinos who invest in their Indiana properties.
The bill would cut the $40 million by $13 million in the first year of SB 528. SIGA claims the loss to each riverboat community will be at least twice as much the following year and every year after.
Ohio County faces the biggest potential decline in gaming revenue if the “hold harmless” funds are lessened or go away completely. The county would see $1.59 million less, or a 60 percent decline, in admissions tax revenue. The City of Rising Sun would see $3 million less, a 61 percent loss. Ohio County tourism board efforts would lose about $158,000 which is also a 60 percent decline.
Dearborn County ($2.59 million), the City of Lawrenceburg ($2.59 million), and Dearborn County tourism ($258,000) would lose 35 percent of their admissions tax revenue. Switzerland County’s admissions revenue would decline 30 percent by $1.4 million while the tourism board there would take a similar hit of $72,000.
“Five counties without casinos will receive more revenue than at least one riverboat county if this bill becomes law,” the report states.
The report concludes by listing perceived winners and losers if SB 528 becomes law. Winners: racinos, casinos, and casinos with properties in Ohio. Losers: gaming communities, Hoosier taxpayers, casinos, and southeast Indiana’s riverboats.
Indiana Governor Mike Pence said Tuesday that he is opposed to any sort of gaming expansion, according to The Indianapolis Star. House Speaker Brian Bosma (R-Indianapolis) has voiced similar concerns.
Pence said as much during his campaign. He told Eagle 99.3 during a campaign stop in Dillsboro days before the election that he preferred the “status quo” in regards to gaming.
“Revenues for the state government and for local governments from gaming has become a part of the fabric of our state since we adopted the referendum in 1988,” Pence said November 4. “My view of that as an element of the state budget or other budgets is the status quo... …I would look for no change.”
During a March 4 Lawrenceburg City Council meeting, Hollywood Casino Lawrenceburg Director of Operations Ahmed Ahmed told council that the casino does not support SB 528.
“There is not a single provision in it, as it stands right now, that appeals to us,” he said.