Spectrum Gaming Group recently released an updated version of its study on the impact iGaming would have on Indiana. It showed the Hoosier State could reap more than $1 billion in tax revenue over the first three years Indiana online casino gaming was legalized.
The update of the July 2022 study was requested by the Indiana Gaming Commission last May. Since then, state legislative leaders have said they would not pursue expanded gaming in the 2024 General Assembly session, which started Monday in Indianapolis.
The market analysis used models based on spending per adult, as a percentage of gross state product and personal disposable income to estimate revenue for Indiana iGaming operators. Spectrum researchers then calculated the state’s revenue based on taxes of 20%, 30% and 45%.
Based on those projections, iGaming operators could expect revenues between $1.93 billion and $2.33 billion over the first three years. Indiana’s tax revenue would be between $373 million and $1.05 billion over that timeframe, depending on the tax rate on Indiana casino apps.
Spectrum Combats Cannibalization Claims
Proponents wanted to use Spectrum’s 2022 study as the basis to pass iGaming legislation in Indiana. However, a fiscal note tied to a bill in last year’s session reported that online casino gaming would undermine the brick-and-mortar product across the state, leading to a concern about potential job losses at the state’s 12 casinos.
Spectrum’s updated report refuted the fiscal note’s analysis.
“When retail casino operators offer iGaming, they can be expected to leverage the digital offering to enhance and grow their retail revenue by marketing their amenities and their loyalty programs to a broader demographic,” the report stated.
Six states currently offer full-fledged iGaming, with Nevada offering online poker for more than a decade and Rhode Island planning to launch online casino gaming later this year. Of the six states, the report found that Delaware, New Jersey, Pennsylvania and West Virginia all saw retail revenues rise from 2019 to 2022- with West Virginia’s casinos reporting an 11% revenue increase.
Michigan’s casinos have reported a roughly 6% drop in revenue over the same period. Meanwhile, slot revenue in Connecticut has fallen by more than 14%, but Spectrum noted the voluntary decision to ban smoking might have impacted the decline.
In addition, Spectrum interviewed iGaming operators and vendors as part of their updated research and found that allowing live-dealer table games would lead to potentially hundreds of new jobs. Evolution, which operates live-dealer games for online casino sites, said it could employ as many as 800 people in the state if iGaming was legalized.
“The significant economic impacts of live-dealer gaming can be realized if the studios are situated in the host state, as is required in four of the five current live-dealer iGaming states,” the report stated.
Criminal Investigation Still Lingers Over Indiana Gaming
Lawmakers last passed an expanded gaming bill five years ago. Not only did that legalize Indiana sports betting, it also opened the door for the casino in Gary to expand and move inland and created the possibility for a brick-and-mortar casino in Terre Haute. Coincidentally, Churchill Downs Inc. announced Monday its Terre Haute Casino Resort would officially open on April 5.
However, a federal investigation into election finance violations in early 2020 led to an inquiry into Spectacle Entertainment. The Indiana-based gaming operator won the licenses for the new Gary and Terre Haute casinos. However, it would be forced to sell its stake in Hard Rock Northern Indiana to Hard Rock International, which would operate the casino.
Spectacle also lost the Terre Haute license after failing to make progress on the project for more than a year. That led to Churchill Downs winning the license in late 2021.
The repercussions went beyond that. John Keeler, a former state lawmaker turned Spectacle executive, and Brent Waltz, another former lawmaker who ran for Congress, also both pleaded guilty to federal crimes. Rod Ratcliff, the founder of Spectacle, had his license revoked. The longtime gaming executive appealed the decision but eventually settled the case with the IGC after agreeing not to be involved in Indiana gaming.
The case continued to make headlines last year as another state lawmaker pleaded guilty to federal crimes, saying he agreed to drum up support for the 2019 gaming bill in exchange for an executive position with Spectacle.
Indiana Senate Pro Tem Rodric Bray, R-Martinsville, has said the Spectacle investigation makes it impossible to consider additional gaming legislation at this time
IndianaBets.com will stay close to any developments as well as provide Indiana casino bonus information.
