INDIANAPOLIS — State lawmakers are putting the final touches on a compromise gaming proposal that significantly alters some of the provisions impacting Northwest Indiana, which previously were separately approved by the Republican-controlled House and Senate.
The proposed legislation reduces to $20 million the fee that Spectacle Entertainment must pay to relocate the Majestic Star casinos from Lake Michigan to a land-based site, likely adjacent to the Borman Expressway in Gary.
That's a 60 percent drop from the House-approved version of Senate Bill 552 which set a $50 million move fee. The House Public Policy Committee initially recommended a $100 million fee.
Spectacle still would be required to surrender the second Gary gaming license. It also would be subject to a second $20 million fee if it sells the new Gary casino to another operator within five years of receiving state regulatory approval to relocate inland.
However, the plan provides that Spectacle would receive a total of $40 million in tax credits from the state over a five-year period in consideration for the second license being made available for a Terre Haute casino.
The new Gary casino also could have up to 2,764 gambling games to match the maximum combined gaming positions offered at the two Majestic Star boats, instead of limiting the inland casino to the gaming capacity of a single boat.
The plan restores the Senate-approved "hold-harmless" for Hammond, East Chicago and Michigan City, so that if a new Gary casino grows Gary's gaming tax revenue beyond its 2019 level, and causes a drop in gaming tax collections for the other Region casino communities, Gary's growth would be used to restore those cities to their 2019 receipts for four years after the new casino opens.
State Sen. Mark Messmer, R-Jasper, co-chairman of the House-Senate conference committee crafting the final gaming legislation, said the hold-harmless is one of the few issues still in flux as lawmakers work toward a final plan that must be re-approved by both chambers on or before April 29 to advance to the governor.
"There's still a lot resistance from House leadership on that," Messmer said.
However, a House-approved provision requiring the Majestic Star to continue employing all its workers at the time of the Gary casino move, and to give hiring priority to any person laid-off from the East Chicago Ameristar Casino following the move, remains in the draft compromise legislation.
The measure also restores a Senate-backed provision allowing Hoosiers to place sports wagers on mobile devices, in addition to betting on sporting events in-person at casinos, racinos and off-track betting facilities.
It authorizes the establishment of a Terre Haute casino, if approved in a local voter referendum, but eliminates the House's complicated scheme for selecting an operator, in favor of letting the Indiana Gaming Commission take applications and pick the company it determines is best suited to build and run the casino, potentially including Spectacle.
In addition, the legislation reduces wagering tax rates on all casinos, permits live dealers at the racinos beginning in 2020 and scraps a House-approved requirement that any meeting between a casino operator and the governor or his staff be conducted in public with 48 hours advance notice.
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Finally, all the gaming language is being relocated into House Bill 1015, from Senate Bill 552, because it includes a 9.5% tax on soon-to-be-legalized sports wagering, and the Indiana Constitution requires new taxes only appear in measures originating in the House.
John Keeler, Spectacle Entertainment general counsel, said the Gary casino owner "can live with" the $20 million move fee, which he said "is much more reasonable than it was."
Spectacle, which acquired the Majestic Star in March, has announced plans to construct a $300 million casino, including a 200-room boutique hotel, adjacent to the Borman Expressway in Gary if the General Assembly permits a move off its Lake Michigan dock.
"We've had some ups and downs, but it looks like it's going to come to a successful close," Keeler said. "We've got a little bit more invested in the license that we're going to lose than the (tax) credit stands right now, so if we could fix that so at least we're whole, we'd be happy."
Gary Mayor Karen Freeman-Wilson, who attended the conference committee meeting at the Statehouse, said she believes the legislation is "going in the right direction."
Freeman-Wilson remains concerned about how the hold-harmless for the other Region casino cities will be calculated and applied.
But she's also excited by the opportunities to redevelop Buffington Harbor into an intermodal shipping hub once the Majestic Star vacates the lakefront area, even though the compromise gaming legislation does not include anything from Senate Bill 66 for establishing a state-city compact to manage and oversee the development.
"Certainly it's always good to have the state as a partner, but we are confident in our ability to make that happen even without the state as a partner," Freeman-Wilson said.
"It has always been our position that the market would take care of the infrastructure improvement as it relates to the intermodal."
Hammond Mayor Thomas McDermott Jr., who has strongly opposed the Gary casino move, sarcastically congratulated Spectacle's primary owner Rod Ratcliff for his success in eliminating most of the fees and restrictions originally proposed by lawmakers.
"Rod Ratcliff played it like a master. All the steak dinners, all the airplane flights, all the convention center work, it all paid off for him," McDermott said. "The Legislature got bought out, the governor got bought out, the speaker of the House got bought out, everybody got a piece."
"A $100 million transfer fee goes down to $20 million. Rod Ratcliff saved $80 million," he added. "The whole thing is very shady. The whole thing is very corrupt."