A casino bill that riled local communities now is riling casino operators, following changes made by an Indiana Senate committee.
Radical revisions made to sections of Senate Bill 528 dealing with the admissions tax and the deductibility of free slot play have soured many casino operators on a bill they originally supported.
"To have people saying this is legislation to help our industry out, when it doesn't help us out at all, is very puzzling," said Dan Nita, general manager at Horseshoe Casino in Hammond.
The bill as originally introduced in the Senate would have helped Indiana casinos compete with casinos in Ohio, Michigan and Illinois.
Casinos in Ohio have 100 percent deductibility when it comes to free play, Nita said. The original bill would have granted that benefit to Indiana casinos, which currently pay taxes even on free play they give patrons as a bonus.
But the Senate appropriations committee knocked that down to where just $2 million of free play per casino can be deducted. Nita said his casino gives tens of millions in free play to patrons every year in various promotions.
At the $2 million cap, Horseshoe would realize about a $600,000 benefit when cross-border casinos are garnering a much larger benefit from deductibility, Nita said.
Those are the type of things corporate parent companies look at when deciding where to make investments in casino improvements or amenities.
In addition, the appropriations committee changed the bill's admissions tax provisions. As originally introduced, the bill eliminated the tax of $3 per head the casinos pay on each customer admitted. In its place, casinos would have paid a supplemental wagering tax equal to 2.5 percent of their revenue.
That tax swap was not intended to help casinos financially as much as it was intended to relieve them of the task of counting heads, Nita said. But the appropriations committee upped the supplemental wagering tax rate to 3.45 percent.
Nita estimates that would cost Horseshoe about $675,000 above what it currently pays in admissions tax.
"Why have a bill at all if it doesn't do us any good?" he said.
Matt Schuffert, Ameristar Casino's general manager, echoed Nita's concerns about both the admissions tax and the free play deductibility.
The general manager of the East Chicago boat said he still thinks something good might come of the bill.
"We are hopeful that further, more impactful changes will be made to Senate Bill 528 as it progresses through the legislative process; changes that will benefit all Indiana casinos,” he said.
Mike Smith, Casino Association of Indiana's president, said there is no doubt the modifications in the Senate have greatly changed many casino operators' opinions on the bill.
"The association's members have mixed feelings about the bill," he said. "There are some that now feel they would rather see no bill at all. And others would like to see the bill proceed but improved."
The bill still contains important benefits for some casinos, such as allowing live dealers for table games at the state's two racinos.
The bill has been passed by the Senate and moved to the Indiana House, where it appears it may also be in for a rough ride.
"In totality the bill appears to me to be a pretty significant expansion of gaming in the state, so I don't anticipate that it will move forward as it is currently constituted," said Speaker of the House Brian Bosma, R-Indianapolis.
The bill also has local communities up in arms. That is because it would wipe out an estimated $27 million in state payments that held local communities harmless from any drops in casino revenue due to the institution of dockside gaming in 2002.
State Sen. Earline Rogers, D-Gary, said she thought it would be better if the House killed this bill and lawmakers try again next year. She said it is better to have no gaming bill this year rather than a bad one that will hurt Gary.