Northwest Indiana casino revenues dropped 2 percent in May, as a new Indiana law took effect allowing casinos to take a tax deduction for free play offered to customers.
The five Northwest Indiana gaming boats took in total revenues of $90.6 million in May, as compared to $92.5 million in May 2012, according to the May revenue report of the Indiana Gaming Commission.
East Chicago's Ameristar Casino was the only gaming boat to eke out a gain, with revenues 3.5 percent higher than in May 2012. Horseshoe Casino revenues were basically even with one year ago, with the Hammond boat raking in $41.1 million.
Horseshoe General Manager Dan Nita said the new law is working as intended -- freeing up casino revenue for other purposes designed to bring in customers and respond to the challenge of neighboring states expanding gaming.
"I believe we are able to have a more level playing field with other states and that is definitely something that will help us," Nita said of the new law.
Indiana casinos now can deduct from taxable revenue up to $5 million for free slot play they offer customers during the state's next fiscal year, which begins July 1. But under a special provision for the last two months of this fiscal year, which is May and June, they can deduct up to $2.5 million during the two-month period.
Revenues at majestic Star's two casinos on Buffington Harbor in Gary dropped a combined 6.4 percent in May, according to the May revenue report of the Indiana Gaming Commission. Revenue at Michigan City's Blue Chip Casino dropped 8.7 percent as compared to one year ago.
The new law led to some confusion as to gross casino revenues early in the day, as the amount deducted for free play at each casino was subtracted from the adjusted gross revenue for each boat, as reported by the Indiana Gaming Commission. The deducted free play revenue was instead inserted into the new deduction category of "free play."
To get an apples to apples comparison of each casino's performance as compared to the year-ago month, for the next 12 months it will be necessary to add the deduction for free play into each casino's gross revenues.