Flawed Fiscal Note Dooms Indiana Online Casino Bill

After three years, Indiana online casino efforts remain stuck at the starting line.

Indiana online casino legislation failed to advance through a House committee by Tuesday’s deadline, killing the bill.

Sen. Jon Ford blamed the lack of progress on a flawed fiscal impact statement produced by the Indiana Legislative Services Agency.

“I think the fiscal is a joke,” Ford told Playin USA. “It may be one of the worst documents I’ve seen come out of our legislative services.”

Fiscal note makes suspect cannibalization claims

Ford worked with Rep. Ethan Manning to draft HB1536. The fiscal impact report included with the bill warned that online casino could cannibalize the state’s brick-and-mortar casino revenue by 30% or more.

According to the report:

“Online casino games will displace some gambling activities occurring at brick-and-mortar casinos. Studies have concluded that up to 30% of new online gaming revenues are displaced from existing casino revenues. This figure could be higher for a saturated market
like Indiana.”

The big problem with the fiscal analysis is it cites a 2011 study from the UNLV Gaming Research & Review Journal. Online casino hadn’t really launched in the US at the time of that study.

Ford found the analysis biased:

“The fiscal analysis on the bill was horrible and made collaboration pretty hard. To use a study from 2011 and not pay attention to the other four or five studies done around the country since then, it appeared to me the fiscal analyst was looking for a study that proved his thought.”

Last year, Spectrum Gaming Group gave a much different take on cannibalization in a report produced for the Indiana Gaming Commission.

“Based on the evidence from the states where iGaming has been introduced, there is little, if any, cannibalization of revenue from established casinos. This is particularly true in states where the in-person gaming options are easily accessible to most of the population, such as in Delaware and West Virginia. Based on the results in other iGaming states, Spectrum believes implementing iGaming in Indiana will have little impact on retail casino gaming revenues in the state.”

Indiana casinos not concerned about cannibalization

If anyone were concerned about cannibalization, it should be the casinos themselves. But Casino Association of Indiana CEO Matt Bell told Playin USA that seven of the association’s eight casinos support the legislation.

Only Churchill Downs with its Queen of Terre Haute Casino Resort opposes online casino.

“We were disappointed when we read the Legislative Service Agency’s fiscal statement,” Bell said. “The cannibalization number was much higher than presented in the Indiana Gaming Commission’s report by Spectrum. And I thought the revenue projection was very low.”

Lack of progress for Indiana online casino

Ford first introduced Indiana online casino legislation in 2021. Final passage was unlikely this year. But lawmakers hoped to start the process of moving the bill.

Manning took over as chair of the House Public Policy Committee, where the bill started. The previous chair didn’t support online casino. Manning obviously does. But Manning never called his own bill for a hearing.

Ford gave this explanation for the lack of a hearing:

“I think there was some discussion that this was a big hurdle to overcome with the fiscal and some folks don’t want to embarrass legislative services.”

Bell said the casino association would work to educate lawmakers and the Legislative Services Agency on cannibalization. He remains optimistic about the future of online casino in Indiana.

“I think that there’s a body of research out there that stands in stark contrast to the LSA fiscal so we’re going to work hard to educate folks using real market data,” Bell said. “We’re also going to have conversations with the Legislative Services Agency and acquaint them with data that I believe tells a very different story.”

Ford serves as president of the National Council of Legislators from Gaming States. He said he would push forward with online casino efforts. But he admitted that this year didn’t go well.

“We’ll move forward in terms of education, but this is definitely a setback in my opinion,” Ford said. “There’s no doubt it’s disappointing. But this gaming education always takes a while.”