State Rep. Files Bill To Legalize Online Casino Gaming In Indiana

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State Rep. Files Bill To Legalize Online Casino Gaming In Indiana
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Perhaps the third time will be the charm to launch internet casino gamling in Indiana.

State Rep. Ethan Manning filed House Bill 1536 on Thursday, which was given a first reading and referred to the Committee on Public Policy. If it passes, operators could offer online poker, roulette, slots, and blackjack in the Hoosier State, as well as digital lottery draw games and representations of scratch-off games. The proposed effective date is July 1, with existing casino license holders in the state eligible to offer online wagering Sept. 1 if approved by the Indiana Gaming Commission (IGC).

Craps is not specifically listed in the bill, although the legislation includes language that references “casino-style games.” The bill also contains provisions for live studio games, in which operators use live video streaming technology to conduct online wagering. Similar to sports wagering in Indiana, a licensee would be allowed to have three online skins for casino gaming, offering the possibility of up to 36 online gaming sites with 12 current casino and racino licensees.

Online casino gaming would be overseen by both the IGC and Hoosier Lottery and be subject to a 20% tax rate on adjusted gross receipts. Operators would also be limited to $10 million annually in deductions from gross revenue for their promotional credits.

Same road, longer runway

This is the third consecutive year an iGaming bill has been filed in Indiana and the second straight year Manning has been part of the effort.

A bill the Republican state representative co-authored last year with Rep. Doug Gutwein proposed an 18% tax rate and was one of two submitted. Though Manning’s bill raises the proposed tax rate to 20%, it is still competitive for potential operators, considering neighboring Michigan taxes internet casino gaming at up to 28%.

There has been much talk among industry experts and lobbyists about Indiana being a likely state in which the nation’s online casino gaming footprint could be expanded in 2023. A report conducted by the Spectrum Gaming Group for the IGC estimated operator revenue of $469 million in the first year of online casino gaming.

Previous bills filed in 2021 and 2022 failed to gain traction and move out of committee, though there is a longer runway this year. The deadline for bills to be approved by the House and proceed to the Senate for consideration is Feb. 27, with it being a budget year that requires a longer legislative calendar.

There was not much of an appetite for movement in last year’s legislative session, given that Indiana had multi-billion-dollar surpluses projected for both fiscal years 2022 and 2023. But with states receiving less federal aid post-pandemic, the need to fill revenue gaps has begun to resurface.

The IGC has helped build a strong overall gaming industry in the state. Online sports wagering handle has accounted for more than $9.2 billion of the $10.5 billion in total sports bets placed since launching in October 2019, and monthly brick-and-mortar casino revenue hovered around $200 million for most of 2022.

There are currently five other states in addition to Michigan offering internet casino gaming: Pennsylvania, New Jersey, West Virginia, Connecticut, and Delaware.