Uncertainty Surrounds Sports Betting Legalization in Indiana

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While Indiana already has an established casino scene, the state has yet to legalize sports betting. Some legislators have tried to push through a bill, but the state regulator has now ordered a study that will attempt to forecast what effect the legalization of sports betting would have on the state.

History of gambling in Indiana

There are 14 casinos operating in Indiana. Ten of them are either based on land or are riverboats that are located on the Ohio River or Lake Michigan. There is another land casino at French Lick and there are two casinos at horse tracks in the state. Finally, there is a single Indian-run casino.

A state ban on lotteries was lifted in 1988 following a state vote. The General Assembly rejected a casino bill in 1989. Voters in Indianapolis did vote on the issue in a non-binding referendum, which passed with 60% support.

Other bills were rejected in following years. After a special session of the Assembly, a number of concessions were made to help appease the Democrats in June 1993, one of which was allowing riverboat casinos.

This made a provision for as many as five locations on the Lake Michigan shores, five locations on the Ohio River, and a single one on Patoka Lake, which is near French Lick. The hope was that as much as $100m (£79m) in taxes annually would be generated as a result of this bill.

There was a competitive bidding process for these licenses; 27 bids were submitted. There were potential sites in 12 cities, each of which voted on whether they would allow casinos; seven of them approved.

By the time of the proposal deadline, the number of applications had risen to more than 50. The Gaming Commission issued the first licenses for boat casinos in December of 1994; one of them was awarded to Trump Hotels & Casino Group.

A law was passed in 2007 allowing the state’s two racetracks, Indiana Downs and Hoosier Park, to introduce as many as 2,000 slot machines at their locations. To enable the riverboat casinos to remain competitive with competitors in nearby states, the legislature in 2015 voted to allow these casinos to create land-based offerings on their current sites.

Potential sports betting legalization

The state decided some months ago to conduct a study of the effects of legalizing sports betting and has now hired a consulting firm, Eilers & Krejcik of Las Vegas, to conduct the research. The two-year contract is worth almost $75,000 (£59,000).

This comes as both houses of the Indiana legislature are preparing their own sports betting bills for study and consideration. Legislators hope to have the initial findings of the study by the autumn as they plan to introduce their bills as early in 2019 as possible.

The bills will tax operators 9.25% of their revenue in addition to the 0.25% federal excise tax. The house bill also contains a controversial integrity fee which would give 1% of revenues to sports leagues, who have been aggressively lobbying for such a provision.

This could add up to as much as 25% of the profits operators make on sports betting. So far, no state has included an integrity fee in bills that have been passed. New York was close to doing so, but the state did not pass any bill in the end.

Other states have provisionally had such a fee included in their provisional bills but have excluded it when it came time to introduce it, which could be the case in Indiana.

With Delaware, West Virginia, Mississippi, and New Jersey already implementing sports betting bills, Indiana looks set to join them in the near future. Eilers & Krejcik released a report in January that estimated more than 17 states would likely legalize sports betting if the Supreme Court did away with the ban.

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