Opinion: Indiana Online Casino Bill Fiscal Note Reveals Fate Of Legislation

Written By Derek Helling on February 8, 2023
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The following is an opinion piece and does not necessarily represent the positions of Catena Media or Playin USA

In an ode to “When Doves Cry” by the late great Prince, this is what it sounds like when bills die. The current Indiana online casino proposal appears doomed as the latest fiscal impact summary attached to the bill acts as the writing on the wall.

For certain, the analysis represents a flawed narrative using an almost hilariously cherry-picked source. Regardless, the existence of that narrative in the fiscal note suggests proponents have more work to do in order to gain the necessary support for gambling expansion.

The big problem with the Indiana online casino bill fiscal note

The Legislative Services Agency for the Indiana Office of Fiscal and Management Analysis produced the fiscal impact statement for HB 1536. Such statements are normal procedure for proposals in state legislatures. They help lawmakers understand the potential ramifications of a bill becoming law.

While objectivity is a virtue for the people preparing these summaries, that vir
tue isn’t always achieved. Predicting fiscal impact can be as much narrative as science. Science records phenomena, reports observations, and theorizes about function.

Narrative, on the other hand, has a destination it is working toward. In the case of the summary for HB 1536, the narrative overtook the science. The statement from the summary which makes the narrative clear is on the fourth page.

“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 main issue with this contention is that the summary doesn’t back up its conclusion with sufficient data. It also ignores an ample amount of data pointing to the contrary.

About those “studies” the summary mentioned

A look at the sources of information that the summary lists on the seventh page reveal just one study (not studies, as the earlier text states) relevant to the issue of whether online casino platforms displace revenues at physical casinos. That study was published in the UNLV Gaming Research & Review Journal in 2011.

This choice would be comical for what a blatant example of cherry-picking data it represents if it wasn’t also sad. The sorrowful aspect of this election is that Indiana legislators will simply browse the fiscal summary and take the conclusion of the report at face value. In the process, they’ll end up misinformed.

The first issue with referencing this material in this context is the enormity of time that has passed since 2011. While a dozen years might not seem like a substantial amount of time in many other contexts, in the online gambling industry the difference between 2011 and 2023 is enormous. In this case, the summary might as well have referenced a study performed in 1811.

Even if this research was more recent, though, it doesn’t represent the entire lexicon of existing data on the subject. In fact, it contradicts most of the other available information. That includes a study that Spectrum Gaming did for the Indiana Gaming Commission in 2022.

That report concluded that there would be “little, if any, cannibalization of revenue from established casinos” should Indiana legalize online casino apps.

Then there is the fact that Detroit commercial casinos are holding steady in their revenue amid substantial online casino growth in Michigan. Furthermore, revenue at brick-and-mortar casinos in both New Jersey and Pennsylvania has grown right alongside the same for online counterparts.

Why would this summary include such a dated study and ignore all other sources? While it’s difficult to determine motivation, the more important conversation is what this tells Indiana residents about the future of HB 1536.

Cherry-picked data becomes legislative talking point

Requests for clarification sent to the Legislative Services Agency about the choice of reference materials have so far gone unanswered, unsurprisingly. There’s little reason to speculate. It’s quite obvious that the summary’s writer(s) searched for some material that would correspond to the narrative they wanted to craft and found it while pretending other data on the matter don’t exist.

Thus, Indiana legislators will be able to cite this point in the summary for why they aren’t supporting HB 1536, regardless of how flawed the point is. This shows that there is still significant resistance in Indianapolis to expanding online gambling.

Amid that resistance, it’s unlikely that HB 1536 will become law in 2023. Also, in order for future iterations to fare any better, proponents of such legislation have more work to do to educate and persuade.

For now, it looks like HB 1536 will get left standing alone in a world that’s so cold.

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Derek Helling

Derek Helling is the assistant managing editor of Playin USA. Helling focuses on breaking news, including legislation and litigation in the gaming industry. He enjoys reading hundreds of pages of a gambling bill or lawsuit for his audience. Helling completed his journalism degree at the University of Iowa.

View all posts by Derek Helling