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Gaming bill a mixed hand for casinos

Gaming bill a mixed hand for casinos

Land-based Gary casino rendering

Spectacle Entertainment plans to construct a $300 million casino, including a 200-room hotel, along the Borman Expressway in Gary.

The gaming bill Gov. Eric Holcomb signed into state law last week offers the same "win some, lose some" outcome casinos' customers might experience on the gaming floors.

Holcomb signed House Enrolled Act 1015 on Wednesday. In addition to allowing an inland Gary casino, it legalizes sports gambling beginning Sept. 1, changes the wagering tax structure to benefit casinos, and moves up permission for live-dealer table games at racinos to Jan. 1, 2020.

"Overall, I think the bill was healthy for the state of Indiana," said Horseshoe Casino Senior Vice President and General Manager Dan Nita. Horseshoe parent Caesars Entertainment also owns a casino in southern Indiana, and the two central Indiana racinos — the combination horse racing tracks and casinos.

Perhaps none will benefit more than Spectacle Entertainment, the new owner of the Majestic Star casino boats.

Gary's move

When casinos first arrived at Buffington Harbor in the mid-1990s, Gary's advantage was having two of them — at the time, Majestic Star and Trump. Because casinos had to set sail, Gary's two boats could offer more embarkation times than the other casino cities were able to offer.

But that advantage was lost with the advent of dockside gaming. And after others built new facilities, the Gary boats fell further behind in customer count and revenue. In April, the two Majestic Star boats took in slightly more than Michigan City's Blue Chip, but only three-quarters as much as Ameristar, and well under half as much as Horseshoe.

When Spectacle acquired Majestic Star, it announced a plan for a $300 million Gary complex, including a 200-room boutique hotel, with new 400 jobs that would grow Majestic's workforce by one-half to about 1,200. The law allows the new Gary casino to have up to 2,764 gaming positions, matching the maximum combined positions offered at the two Majestic Star boats.

But a Gary move inland also would create a new dynamic regarding the lucrative Illinois customer base, putting East Chicago's Ameristar Casino and Hotel between Horseshoe near the state line and the new Gary casino more easily accessible from the interstate.

In testimony March 20 before the House Public Policy Committee, Ameristar Casino and Hotel Senior Vice President and General Manager Matt Schuffert argued the inland move in Gary would upset an equilibrium that had encouraged casinos to make capital investments, and that a new casino wouldn't increase the number of casino patrons, but rather redistribute the existing ones.

"Since the inception of gaming in our Hoosier state, Indiana has been a beacon of stability, predictability and certainty as it relates to a good business environment," Schuffert told the committee. And that's encouraged investments like the $20 million Ameristar spent in 2018 on a new high-stakes room and a renovation of its existing casino boat, he said, all while "playing by the long-standing existing rules of the game."

Allowing a new casino along the Borman Expressway "will not create new customers" but will "send patrons from existing operations to this new casino," he said.

Sports betting and free play

Holcomb said he signed the bill to "modernize our laws" because the gaming industry "once had little competition, but now does from surrounding states and new technology."

That competition includes sports wagering, already legal in several states and "in some cases, it's attracted a brand new guest to the casinos," Nita said.

Gaming companies have linked up with other companies or bolstered in-house operations to handle the new business, including by preparing to host sports gamblers.

"We're actively engaged to be operational this fall," Nita said of Horseshoe. "We're close to finalizing our location."

He said Horseshoe's in-house sports gaming — it will also be available in mobile form — will be in a high-visibility, high-traffic area near food and beverage service. It also needs wall space to showcase various sporting events.

The state law also increases the dollar level of free, promotional slot machine play casinos can deduct from their taxable revenue. "Going from zero to $5 million to $7 million to $9 million — that's absolutely provided flexibility to continue to market to our guests," Nita said.


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