HAMMOND | The proposed elimination of a tax on state casinos may mean the loss of approximately $4.5 million in annual gaming revenue to Hammond, city officials say.
A state legislator is proposing the state do away with the admissions tax on casinos, and, in its place, create a new tax to supplement the current wagering tax.
Why Hammond may feel an impact is found in what City Controller Bobby Lendi describes as a “complicated nuance” of the proposed legislation.
The amount of wagering tax Hammond can receive is capped at $13.7 million a year, and the city usually hits that cap within the first seven to eight months.
“Some boats, some gambling establishments, some of those hit their cap and some don’t,” Lendi said. “We hit our cap every year.”
At issue is whether the proposed supplemental tax will fall under the existing cap of the wagering tax, Lendi said. If it does, Hammond is expected to take a financial hit comparable to the approximate $4.5 million it receives through the admissions tax.
Hammond’s approximate $36 million per year in gaming revenue plays an integral role in city finances.
For this year’s budget, the city used $12 million of the revenue to shore up the city’s general fund. Gaming revenue also supports the College Bound program and is used to provide a $3.5 million annual payment to the Northwest Indiana Regional Development Authority.
The bill, authored by state Sen. Phil Boots, R-Crawfordsville, cleared an initial Senate committee by a unanimous vote and is now assigned to the Senate Appropriations Committee.
On Friday, state Sen. Earline Rogers, D-Gary, said she wants a land-based casino for Gary added to the bill, a change Boots told The Times he's against.
Boots released a statement on the bill Friday, though he did not address Hammond's concerns on the supplemental tax.
“It's no secret Indiana's gaming industry faces long-term challenges,” according to Boots in a statement. “The goal of this bill is to allow Indiana casinos to remain competitive with surrounding states, and to protect the vital state revenue that this industry has always generated.
"Though it's a work in progress and will certainly require consensus building among multiple parties, I believe the General Assembly can pass a bill that protects our state interest while enabling casinos to effectively respond to changing market conditions.”
While the bill may have potential impacts for the city, it won’t affect the Hammond Port Authority because it now receives a flat fee of $7 million from the Horseshoe Casino, said Milan Kruszynski, the authority's director. In the past, the authority received an admissions fee from the Horseshoe but that changed when the new boat was built, Kruszynski said.
Horseshoe Casino is neutral on eliminating the admissions tax but is against a land-based casino for Gary, said Erin Chamberlin, Horseshoe assistant general manager.
“Our biggest position has always been we want something that benefits the industry as a whole rather than one particular casino,” Chamberlin said.