Jon Ford, a Republican member of the Indiana Senate, said during a nationwide remote panel on Wednesday that online casino gaming legislation could be on the horizon in the Hoosier State.
“On the table for us in the next session will be iGaming,” Ford said as part of a panel invited by the National Council of Legislative Gaming States (NCLGS). “I think we’ll take a hard look. The goal again will be to keep barriers to entry low, and with low taxes to bring [customers from] the gray market in as much as possible.
“Neighboring states (Michigan) have passed iGaming, so it’s time we take a look at that. And sports betting shows these are folks not being touched by brick-and-mortar states.”
Ford was referring to the fact that states such as New Jersey and Pennsylvania, in the pre-COVID-19 era, saw traditional casino revenue rise even with the introduction of online casino offerings with those casinos as partners. A bill could be introduced early in 2021.
The history of Indiana and gambling, Ford added, has not always been a smooth path.
Expectations versus reality
“Like many Midwestern states, we started with rural riverboat casinos and with expectations set very high 28 years ago,” Ford said. “We would put casinos in rural river towns, and business would come.
“But for the most part, that did not come true,” Ford said, though pointing to Evansville as an exception.
“In 2008, in the middle of the Great Recession, the racinos idea came along, and again gambling was looked at as a cash cow,” Ford said during the 75-minute panel. “Two racinos would be licensed at $500 million – but that got negotiated down to $250 million per license.
“There just wasn’t much forethought into the quality of the product, so there were high fees and we did not allow table games at the racinos. The first companies that bought in did go into bankruptcy.”
But the landscape was entirely different, Ford noted, with a comprehensive gambling bill that featured retail and mobile sports betting.
“We have a low tax rate and entry fee,” Ford said, with three “skins” for each casino and racino to use for mobile sports betting. “The 2019 bill was a departure from the way we looked at gaming. It was more how to make an environment more favorable for investment. We started to look at it more like an industry, like manufacturing.”
The result has been more than $1 billion in handle, or amount wagered, in just under one full year.
Illinois in the crosshairs
Another panelist, Penn National Gaming CEO Jay Snowden, said that states hungry for revenue need to be wary of Illinois’ example with video gaming terminals (VGTs).
“VGTs destroy jobs and deter capital investment,” said Snowden of the more than 30,000 such machines located at truck stops, bars, restaurants, and other small businesses all over the state except for the Chicago area. “These machines are difficult to regulate and provide easy access for problem gamblers and children.”
Snowden added that almost 40% of those who have signed up to “self-exclude” from gambling say they did so due to VGTs.
With Illinois among the 19 states where Penn National operates — it has three casinos in the state — Snowden said that as a defensive move, the company even has gotten into the VGT game itself.
But he added, “This can’t be a solution to budget woes,” given the decline in Illinois casino revenues once VGTs came along in 2012.
“I’m from Las Vegas, and I have been passionate about the industry since a young age,” Snowden said. “And I believe that VGTs put a black mark on the industry. That upsets me, because I love this industry.”
Snowden also included projections that show that by 2030, iGaming would be a $11 billion industry and sports betting would be at $10 billion.
Casinos and cash – end of an era?
Bill Miller, president of the American Gaming Association, used much of his time to talk about a fundamental change he wants to see at casinos — the end of cash requirements.
“Payment modernization is now more important than ever,” Miller said. “A consumer is familiar with modern payment options in every other aspect of their life, and they want the same choices on the casino floor.
“Digital payments also are a powerful tool for customers to monitor their spending better than using cash ever could.”
Snowden echoed Miller’s sentiment.
“We are the only legitimate industry left still doing 100% of business with cash,” Snowden said. “It’s crazy.”
Snowden said that even automated teller machines (ATMs) are considered too old-fashioned for people in their 20s and 30s. He said that states such as Louisiana, Nevada, Indiana, Ohio, and New Jersey are among the states looking into modernizing.
“But you have some states still stuck in the 1980s and 1990s, and that needs to change,” he added.
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