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House panel cuts ante for Gary casino move in half to $50M
2019 Indiana General Assembly

House panel cuts ante for Gary casino move in half to $50M

INDIANAPOLIS — A potential impediment to relocating Gary's Majestic Star casinos from Lake Michigan to a better trafficked site adjacent to the Borman Expressway was minimized Tuesday by the House Ways and Means Committee.

The panel revised Senate Bill 552 by cutting in half the proposed fee Spectacle Entertainment would be required to pay the state to consolidate its two riverboat casinos, which are marketed as one casino, into an actual, single, land-based facility.

State Rep. Todd Huston, R-Fishers, the committee co-chairman, said a $50 million move fee, instead of the $100 million adopted last week by the House Public Policy Committee, is appropriate because merging two casinos into one will end up forcing Spectacle to pay an additional $10.5 million a year to the state and local governments due to how Indiana's gaming taxes are structured.

"Ongoing, that's a positive for the state and the local community, but at the expense of the operator," Huston said. "We felt like we needed to acknowledge that, and that's being acknowledged in the reduction from $100 million to $50 million."

The money would have to be paid to the state's general fund in two equal installments: $25 million when the relocation is approved by the Indiana Gaming Commission; and the second $25 million exactly one year later.

Spectacle also still would be required to surrender the second Gary gaming license, without compensation, as a condition of receiving state approval to move off Lake Michigan.

At the same time, the proposal permits Spectacle to operate up to 2,764 gambling games at a land-based casino, to match the maximum combined gaming positions offered at the two Majestic Star boats, instead of limiting the new casino to the gaming capacity of a single boat.

That would mean the new Gary casino could have about the same number of slot machines and table games as the Horseshoe Casino in Hammond, and be approximately one-third larger than the Ameristar Casino in East Chicago and the Blue Chip Casino in Michigan City.

In light of that potential market shift, state Rep. Earl Harris Jr., D-East Chicago, attempted to revive "hold-harmless" language, similar to a provision previously approved by the Senate, to ensure that Hammond and East Chicago maintained nearly all their current gaming tax revenue following the Majestic Star move.

He also proposed requiring the new Gary casino to continue employing every person currently working at the Majestic Star and to give hiring priority and offer job training to any person laid off from Ameristar Casino.

"Let's ensure that our people don't go from being employed to unemployed because of a decision that we have made," Harris said.

Those amendments were defeated on party-line votes by the Republican-controlled committee.

Huston said there will be plenty of time to consider hold-harmless provisions in future legislative sessions, since any financial impact from a Gary casino move, positive or negative, likely won't be seen until at least the 2021 General Assembly.

A third Harris amendment, requiring the state to pay all motorist tolls on the new Cline Avenue Bridge for 10 years, also was rejected.

Other revisions to the gaming legislation approved by the committee included decoupling the potential Gary casino move from the decision of whether to allow a new casino in Terre Haute.

The measure provides that Terre Haute will receive a gaming license if casino gambling is approved by Vigo County voters.

It also sets up a local-state process for evaluating potential casino operators, and requires an auction to decide which operator ultimately will run the casino.

Sports wagering still would be limited to in-casino bets only and not available on mobile devices. Though Huston said he suspects the full House will vigorously debate that question later this week.

The legislation also now includes a 9.5 percent state tax on a casino's adjusted gross receipts attributable to sports wagering, with slightly more than 3 percent of the revenue from that tax earmarked for addiction treatment, including gambling addiction.

In addition, the plan slightly reduces traditional wagering taxes paid by casinos in ways that Huston hopes will make Indiana "competitive with our neighboring states" and generate "investment in Indiana."

The revised proposal was approved 17-6, with Harris, the only Region committee member, voting yes.

If the measure, following further amendment, passes the House next week, members of both the House and Senate will meet in a conference committee to hammer out a compromise version that must be approved again by both chambers to advance to the governor.


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