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For NWI casinos, it's been 20 years and $20 billion
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For NWI casinos, it's been 20 years and $20 billion


The history of casinos in Northwest Indiana is replete with larger-than-life characters, billion-dollar bankruptcies, corporate buyouts and constant competitive pressure.

Trump, Barden, Binion, Harrah's and Caesars, Chapter 11 bankruptcy and Real Estate Investment Trusts — they're all part of the Region's gambling story, which has reached its 20th anniversary this month at the Hammond and Gary casinos.

It began with Don Barden and Donald Trump negotiating their way to a shared use of Gary's Buffington Harbor for their Majestic Star and Trump Princess casinos. They launched their boats on June 11, 1996, promising grand times for their businesses and host community.

"I think this is going to be an enormously successful venture," Barden said when the Gary-based boat cast off on a preview cruise in 1996.

"You can see all the people flowing in with smiles on their faces and money in their pockets."

"I know Gary's had some rough times over the years," Trump said at his casino complex's 1995 groundbreaking at Buffington Harbor, "but this is really the beginning of the end to those rough times."

While such promises of a bright future and quick turnaround for communities proved overly optimistic, the two casinos in Gary and three others in the Region are still afloat and continue to meet oncoming challenges with new investments and evolving entertainment options.

During their two decades in business, the five Northwest Indiana casinos have taken in more than $20 billion at their gaming tables and slot machines, with hundreds of millions of that reinvested in their properties and sent to state and local government in taxes and grants.

Investments 'raise the bar'

The early pledges for capital investment were relatively low: $154.5 million from Showboat in East Chicago; $153 million from Trump in Gary; $137 million from Empress in Hammond; $116 million from Majestic Star in Gary; and $87 million from Blue Chip in Michigan City, according to reports by the Center for Urban Policy and the Environment at Indiana University-Purdue University Indianapolis.

The Lake Michigan casinos skip over Porter County. Voters there disapproved of gaming operations in a 1993 referendum.

While the casinos have ridden rough waves in the economy and within their industry, operators of local boats have confronted new competition aggressively, while taking advantage of opportunities afforded by changing state laws.

The original Empress Casino in Hammond — officially open for business on June 29, 1996 — was a standard boat at 43,000 square feet of gaming space. That was equal to Gary's Majestic Star and in the middle of the pack for Indiana casinos.

Just more than a decade later, Empress' successor, Horseshoe, would spend about $500 million on a new casino and entertainment complex with a gaming floor of 108,000 square feet.

"It's been an amazing journey from the small riverboat known as Empress that took up residence in this location 20 years ago to today's Horseshoe Casino," Regional President and General Manager Dan Nita said.

A change in state law — allowing dockside gambling and then 24-hour-a-day entry and exit — made the new entertainment complex possible, and Horseshoe's growth to first place in the market made it want to undertake such an ambitious project.

"We wanted to raise the bar on what casino entertainment could be in the area," Nita said. Customers wanted a relatively large, single-level casino — "a Las Vegas resort feel."

The resulting gaming, dining and theater facility also served Horseshoe's parent company's needs. Caesars Entertainment has nine casinos in Las Vegas, and others in places such as Lake Tahoe and New Orleans.

The Chicago area is a prime market for those casinos, and the new Horseshoe Hammond allowed the company to "put our best foot forward," Nita said, building loyalty to the brand that vacationers might take with them.

Other Northwest Indiana casinos also invested tens, and even hundreds, of millions of dollars in their facilities.

Ameristar was the third casino to open a hotel, behind Majestic Star and Blue Chip, but Ameristar upped the ante with its $43 million, 293-room tower along the East Chicago lakeshore in 2002. That facility would receive a $7 million upgrade a decade into its life.

And the opening of Four Winds Casino in New Buffalo almost a decade ago was met in Michigan City by Blue Chip's gleaming hotel tower and new casino. Blue Chip spent more than $300 million combined on those projects.

Now, a Majestic Star plan to move on land will take advantage of the state's most recent easing of regulations, allowing the casino to build on land that's part of its original development footprint.

Majestic Star began studying its Buffington Harbor property to determine the best place for a casino earlier this year, and has engineers and construction professionals evaluating the property now "to determine which of the potential sites within our campus footprint can physically support the future construction," according to Chareice White, Majestic Star's director of government, community and public relations.

Competition and changing tastes

Even with the expanding lodging, entertainment and dining amenities, "the vast majority of our revenues come from the casino floor," Horseshoe's Nita said.

A review of gaming revenue over the last 20 years reveals a decade of growth followed by recession and post-recession years of lower revenues. Horseshoe was an outlier in that — its revenues continued to grow at its new casino.

But overall, 2007 was the peak year, with the five Northwest Indiana casinos taking in nearly $1.3 billion in gaming revenue. By 2015 that number had fallen to $977 million.

In addition to general economic challenges, competitive challenges come from several fronts: Four Winds in Southwest Michigan and its plans to build in South Bend; Illinois' allowance of video gambling in noncasino businesses; and changing entertainment demands, especially for younger people focused on social experiences and skill-based activities.

The growing importance of table games in casinos is "somewhat a function of the social nature of table games relative to slots," Nita said.

That demand for a more social experience can be seen in other entertainment industries, he said. "People want to be in a more social environment."

Casino operators are pushing slot machine manufacturers to incorporate a social element — as well as a skills-based element — into electronic gaming, Nita said.

Amid the challenges, the gaming business remains robust, operators said. As evidence, Nita points to Horseshoe's 20-year totals of 97 million guests, nearly $8 billion in gaming revenue and nearly $2 billion in salaries, wages and benefits.

Majestic Star's management also is optimistic about the future.

"The casino industry in Northwest Indiana is stable, even with the decline in revenue," White said. "Although we are in the highly competitive Midwest market, Indiana continues to be a great place to operate a business."


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