Pharos-Tribune

Local News

April 19, 2013

Budget forecasters predict bigger drop in gaming revenues

Bipartisan group: State needs to protect income source.

INDIANAPOLIS — While a gaming bill is still in play in the General Assembly, state budget forecasters are predicting the payoff to the state from legalized gambling will be even lower then expected.

The April budget forecast released this week predicts revenues from the state’s casinos and racinos will drop by $71.5 million more over the next two years than what those forecasters predicted just four months ago.

The quicker-than-expected plunge in gaming revenues is critical as the General Assembly crafts its final biennial budget and debates a watered-down gaming bill that was supposed to the buffer the state’s casinos from growing competition.

And it may be worse than it looks, according to one of the chief budget makers who thinks the latest forecast low-balls the coming losses.

“I thought they should have shown a bigger drop,” said Senate Appropriations Chairman Luke Kenley, a Republican from Noblesville. “I don’t think they show the true impact of what’s going to happen. [Gaming] has been a big revenue producer for Indiana, but I don’t think it’s going to continue to be.”

Since the first riverboat casino opened in Indiana in 1995, the state’s gaming industry has poured more than $10 billion in taxes into the state’s coffers, becoming the third largest source of revenue for the state’s general fund.

But with rising competition for gaming dollars in neighboring states — including four new casinos in Ohio — the pool is growing smaller. While the two racinos (horse track-based casinos) have been holding their own, admissions and revenue at the state’s riverboat and land-based casinos are down over the last three years.

The state’s budget forecasters have been preparing for the loss. In their December 2012 forecast prepared for the budget makers in the General Assembly, they estimated overall gaming revenues would drop from about $567 million in fiscal year 2013 to just over $520 million by the 2015 fiscal year.

Four months later, in the April forecast used in the final budget bill negotiations, estimates are more grim: they’re now predicting a drop to $492 million by 2015. That includes a drop in racino tax revenues, from $117 million in 2012 to just over $95 million by 2015.

For lawmakers like Rep. Terri Austin, a Democrat from Anderson with the Hoosier Park Racing and Casino in her district, the latest forecast numbers are evidence that the General Assembly needs to act this session, before it ends April 29.

“This really paints the picture that we must do something to protect the state’s revenue source,” Austin said. “It’s our third largest revenue stream, aside from personal and sales taxes, and the state depends on that money at this point.”

Austin is part of bipartisan group of lawmakers with casinos in their districts frustrated that a gaming bill, Senate Bill 528, has been watered down from an original version aimed at giving casinos more flexibility to compete.

The current version of the bill, now caught in House-Senate conference-committee negotiations, prevents casinos from expanding their physical footprint and bars racinos from adding live table games, which would result in about 600 new jobs.

“This industry employs thousands of people,” Austin said. “So we’re trying to do two things: Trying to make sure we don’t hurt ourselves in unemployment picture and at the same time, keep our revenue stream as protected as possible.”

Republican Gov. Mike Pence, who wants a 10 percent income tax cut in the final budget bill, opposes adding live table games at the racinos, calling it an expansion of gaming he won’t support.

Ed Feigenbaum, publisher of Indiana Gaming Insight, said the downward revised numbers in the April forecast shouldn’t come as a surprise.

Numbers released by the Indiana Gaming Commission earlier this month showed Indiana’s riverboat casinos took another financial hit in March, after five consecutive months of lower revenues. The most dramatic: While a brand new casino in Cincinnati raked in $21 million in March, the Hollywood Casino in Lawrenceburg, 30 miles away, saw revenues drop by $9.8 million from a year ago, or 25 percent.

“That just confirmed everybody’s expectations,” Feigenbaum said.

The drop in gaming dollars is due to more than just the new casinos in Ohio, Feigenbaum said. When the federal payroll-tax holiday lapsed late last year, the paychecks of wage earners dropped about two percent. “That left people with less disposable income, particularly those discretionary dollars used for entertainment.”

For Feigenbaum, the April budget forecast prompts the question: When will the state start to wean itself off the gaming tax dollars?

“We’re not going to be able to rely on them to extent we did before,” he said. “Even if we expand gaming — in whatever form that takes — it’s not going to be possible to regain that kind of revenue again.”

Maureen Hayden covers the Statehouse for the CNHI newspapers in Indiana. She can be reached at maureen.hayden@indianamediagroup.com.

 

For more on this story and other local news, subscribe to The Pharos-Tribune eEdition, or our print edition

1
Text Only | Photo Reprints
Local News
  • NWS-PT072214 Western Wildfires.jpg Local volunteer to help wildfire victims A Flora resident will be among the volunteers helping those affected by the wildfires in Washington State.Pat Rinehart was scheduled to fly out of Indianapolis International Airport Monday afternoon and join fellow American Red Cross volunteers at th

    July 22, 2014 1 Photo

  • No Headline Provided Search for man continues at lake MOROCCO (AP) — Recovery crews are searching for the body of a Hammond man believed to have drowned at Willow Slough Fish and Wildlife Area. Indiana conservation officers say 24-year-old Saul Lopez disappeared Saturda

    July 22, 2014

  • NWS-PT072214 Lauren Ray.jpg Logansport graduate makes a go at Hollywood “Instincta,” the latest film by a 2008 Logansport High School graduate, will be screened at the Gen Con Indy Film Festival in Indianapolis in August.It is an action, thriller cop drama short film, starring Logansport native Lauren Zehner Ray, Michael

    July 22, 2014 1 Photo

  • EDU-PT072314 whitley lehr.jpg School's top honor goes to local grad Whitley Lehr chose Indiana University Kokomo because of its excellent School of Nursing. Receiving the campus’ most prestigious scholarships sealed the deal for each of her. The 18-year-old Delphi student called the Herbert Scholarship “a huge blessi

    July 22, 2014 1 Photo

  • NWS-PT072214-Gwin3-BCM Landis Elementary teacher back from China experience Steve Gwin has hundreds of pictures already on his new laptop, just months after buying it. He spent the month of June in China teaching to kids at two schools and chronicled about each adventure.Gwin teaches first grade at Landis Elementary and got

    July 22, 2014 3 Photos

  • Four injured when motorcycles collide Four people were injured Sunday when a motorcycle rear-ended another motorcycle. The accident occurred at 4:06 p.m. Sunday on the ramp from U.S. 35 North at U.S. 24, according to Cass County Sheriff Deputy Brad Craven. Riding a 2012 Harley-Davidson,

    July 21, 2014

  • Police Blotter: July 21, 2014 Have a tip? Anyone with information on a crime is encouraged to call Crime Stoppers at 800-222-TIPS. Information leading to an arrest or conviction could lead to a reward of up to $1,000.

    July 21, 2014

  • NWS-PT072014 Corn2.jpg Bumper crop? Corn farmers hopeful that good weather lasts Several Cass County corn farmers say they may see record-breaking harvests this fall thanks to “perfect” weather during the spring growing and summer pollination periods.“I think it’s going to be one of the best crops we’ve ever harvested,” southern

    July 21, 2014 4 Photos

  • Monticello puts cardboard to the test MONTICELLO — Lori Abbott has been collecting pieces of cardboard for months now, in anticipation of the Monticello Rotary Club Cardboard Boat Regatta.“After work, I go home and work on the boat,” Abbott said.The second annual cardboard boat race is h

    July 21, 2014

  • BIZ-PT072014 kesling 3D scanner.jpg Fitting in: Kesling's acquires 3-D scanner It’s like something out of Star Trek.You set your foot onto a glass pane. A small camera runs on a track around the pane, aimed all the while at the sole of your foot. And after about 15 seconds, the camera sends a 3-D image of your foot through the

    July 20, 2014 1 Photo

Featured Ads
More pharostribune.com
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide
AP Video
UN Security Council Calls for MH 17 Crash Probe Obama Bestows Medal of Honor on NH Veteran Texas Sending National Guard Troops to Border Hopkins to Pay $190M After Pelvic Exams Taped Foxx Cites Washington 'Circus Mirror' NASA Ceremony Honors Moon Walker Neil Armstrong Obama Voices Concern About Casualties in Mideast Diplomacy Intensifies Amid Mounting Gaza Toll AP Exclusive: American Beaten in Israel Speaks Obama Protects Gay, Transgender Workers Raw: Gaza Rescuers Search Rubble for Survivors Raw: International Team Inspects MH17 Bodies Raw: 25 Family Members Killed in Gaza Airstrike US Teen Beaten in Mideast Talks About Ordeal 'Weird Al' Is Wowed by Album's Success Shark Sightings a Big Catch for Cape Tourism Native American Teens Get Taste of College Legendary Actor James Garner Dies Ukraine Rebels: Black Boxes Will Be Returned Recording May Show Attempt at Crash Cover-up
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.
Poll

The Pence administration continues to cut Indiana agency budgets despite a state surplus of $2 billion. Is this wise management of state funds?

Yes
No
Not sure
     View Results
eEdition