Indiana Online Casino Efforts Begin With New House Bill

January 20, 2023
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Although the chances of passage remain slimmer than most advocates would hope, Indiana legislators have begun to mount their 2023 effort to enact online casino legislation in the state.

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Although the chances of passage remain slimmer than most advocates would hope, Indiana legislators have begun to mount their 2023 effort to enact online casino legislation in the state.

Republican Representative Ethan Manning late last week filed House Bill 1536, which would permit licensed casinos and racetracks to obtain licenses to offer online casino gaming, including poker, blackjack, or other card or slot-based games “typically offered at a casino.”

Each licensee would receive up to three online casino skins, matching the number the legislature permitted each entity in earlier legislation allowing sports betting in 2019.

The interactive gaming license would come with an initial $500,000 fee, and $50,000 annual renewals. Online casino vendors would pay a $100,000 license fee, with $25,000 annual renewals.

The bill also proposes a 20 percent tax rate on online casino revenue, with an allowance of up to $10m annually for promotional credit that can be deducted from taxable income.

For comparison, sports betting is taxed at 9.5 percent, while land-based casino gaming is subject to a graduated tax that ranges from 15 percent to 40 percent.

Since the success of passing sports betting and other gambling legislation in 2019, efforts to pass online casino in Indiana have stalled for a myriad of reasons.

These reasons include a lack of unity among casino stakeholders, moral objections among key legislators, and a concern from legislators about getting involved with gambling legislation again following a recent campaign finance corruption scandal that implicated several legislators and former casino owner Rod Ratcliff.

The Indiana Senate has presented a particular challenge for previous efforts, and Senate President Pro Tempore Rodric Bray, a Republican, has indicated that 2023 may not be different in that respect, telling the Indiana Capital Chronicle through a spokeswoman earlier this month that he did not expect online casino legislation to move this year.

Bray specifically pointed to the significant gaming expansion that already occurred in 2019, a lack of constituent support, and the fact that Indiana already performs strongly in terms of gaming revenue.

However, some hurdles that have existed in the past have begun to clear.

For one, the Casino Association of Indiana, which represents eight Indiana casinos, has been united in recent years in its support of online gaming.

In addition, Manning, the bill sponsor, is the new chairman of the House Committee on Public Policy, the committee to which the bill was referred on Thursday (January 19). The previous chairman, Republican Representative Ben Smaltz, was an opponent of online gaming and was in part responsible for the bill stalling in committee in 2021.

This year's legislation also includes a role for the Indiana state lottery via provisions that would authorize the Hoosier Lottery to offer interactive draw-based and instant games.

HB 1536 could receive its first hearing in front of the committee as early as next week.

A key deadline to watch will be the February 27 crossover deadline, which requires any bill to clear at least one chamber of the state legislature in order to continue to move forward.

Still, even if the bill does clear the House by then, some are skeptical there would be enough time for the Senate to follow suit before the 2023 session adjourns on April 28, especially without having already started its own committee review process beforehand and without support from the Senate President.

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