Lawmakers prep for 2015 gambling debate, ailing industry looks for ways to expand

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INDIANAPOLIS — Leaders from Indiana's ailing gambling industry pleaded their case before lawmakers Wednesday, looking for ways to attract more customers and beat back competition from out of state that has sprung up in recent years.

Lobbyists and executives from the state's casinos and "racinos" — racetracks with slot machines — ran down a list of changes lawmakers could make that, they said, would revive the business. Two of their top requests are for lawmakers to allow riverboat casinos to move ashore and allow table games two racinos.

They are also seeking changes in how they are taxed. One proposal calls for deducting free play, or promotional play, credits from the amount casinos are taxed. Ryan Soultz, lobbyist for Boyd Gaming Corporation, which owns Blue Chip Casino in Michigan City, argued that free play makes it easier for casinos to attract customers.

"Every dollar of promotion adds $3-$4 of spending," Soultz told the panel.

Indiana casinos long had a monopoly on large-scale gambling in the region, but Ohio began opening casinos just across the border two years ago. Kentucky, which legalized slot machine gambling a few years ago, is considering adding a casino.

Taxes on Indiana's gambling industry at one point made up one of the state's largest sources of tax collections, generating almost as much money as personal income taxes. But that number has dropped precipitously recently, contributing to state budget woes.

Collections on the wagering tax — which ranges between 15 percent and 40 percent of the amount gambled at each location — dropped from $686 million in 2013 to $596 million this year. The amount collected through the admissions tax dropped from $67 million in 2013 to $58 million at the close of the state's most recent budget.

Overall, Indiana's tax collections dropped slightly from 2013 to 2014, and budget leaders have cautioned agency heads to prepare for another year of tight spending. Meanwhile, Gov. Mike Pence has sought cuts in various areas to maintain $2 billion in cash reserves left to him by former Gov. Mitch Daniels.

At the opening of Wednesday's hearing, House Public Policy Committee Chairman Tom Dermody, R-LaPorte, hinted at some of the political obstacles that must be overcome if lawmakers are approve anything that could be considered expanded gambling. Pence has said he opposes any expansion of gambling.

Rep. Matt Lehman, R-Berne, cautioned his colleagues against stretching too far in however they define what counts as an "expansion" of gambling.

"We seem to play a little fast and loose with the definition," he said. "At some point somebody's going to say 'That's an expansion.'"

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