Kokomo Tribune; Kokomo, Indiana

Local News

April 19, 2013

Gaming revenue predicted to drop

Gambling is one of the state’s largest funding sources.

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 than they thought.

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 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, or 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 before this session 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 a 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 the 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. 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 2 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 gaming tax dollars?

“We’re not going to be able to rely on them to the 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.

1
Text Only | Photo Reprints
Local News
  • Question Time: Name a baby (or babies) today

    “Imagine you’re having a baby (or babies) today. What would you name it (or them) and why? (You can give answers for a girl, a boy or both; and any combination for twins, triplets, etc.)”

    April 20, 2014

  • 400SUnion.jpg Counties move forward with flood mitigation one year later

    One by one, properties were bulldozed from the neighborhood between Carter and Murden streets in downtown Kokomo, physically erasing evidence of residential flooding in an area long prone to it.

    April 20, 2014 1 Photo

  • Flooded area - E Murden 01 Jaimz family seeks closure after losing everything Ashley Jaimz and her sister, Amanda Urbina, took a drive through the Cedar Crest neighborhood the other day to view how residents were faring in the wake of a Nov. 17 tornado. The drive was intended to provide some closure to Jaimz, who is still stru

    April 20, 2014 1 Photo

  • NWS - FEMA 03 Kokomo resident whose basement collapsed during flood repairs own home

    Walter Raderstorf can still remember sitting in his living room inside his home on West Park Avenue, realizing he had escaped a brush with death. “I was in the basement carrying stuff up and I came in here and sat down,” he said. “It wasn’t 30 second

    April 20, 2014 2 Photos

  • Late Kokomo teacher dedicates estate to foundation Longtime Kokomo School Corp. teacher Holly Kirkpatrick will continue to have a positive impact on students thanks to a $38,000 donation from her estate to the Kokomo Public Schools Education Foundation. Kirkpatrick died in November 2012 after teachin

    April 20, 2014

  • flood anniversary Thomas family ready to move on after flood In the Thomas household, few things take precedent over baseball. You’d be hard-pressed to find a couple more dedicated to youth baseball in Kokomo — or anywhere else for that matter — than Michael and Lashanda Thomas, who have passed that love of th

    April 20, 2014 1 Photo

  • EasterEgg hunt 10 'Controlled chaos' at city's Easter egg hunt With buckets and Easter baskets in hand, hundreds of kids 10 years old and younger packed Kokomo's Northwest Park Saturday to see who could grab up the most Easter eggs. Organizers split the kids up in three age groups, 0 to 3, 4 to 6 and 7 to 10, wi

    April 20, 2014 4 Photos

  • NWS-FloodFollowDay2-15.jpg April flood brought people together to bail out community

    [Editor’s note: On April 19, 2013, a record flood hit Howard and Tipton counties. Today, we look at some of the financial aspects of the flood. In Sunday’s edition, look for stories about people who were affected, what has changed in the floodplains and how the communities are moving forward.]

    April 19, 2014 1 Photo

  • NWS-KT041914-TwoinjuredinMiamiCocrash-CLG-pic.jpeg Two injured in Miami County crash

    PERU — Two people were injured Thursday afternoon in a two-vehicle crash at the intersection of U.S. 24 and Ind. 19.

    April 19, 2014 1 Photo

  • Farmer loses seat belt fight on appeal

    Denver-area farmer Thomas Fox doesn’t like to wear his seat belt.
    But after his lengthy fight with the Indiana courts over a seat belt violation, Fox may be rethinking his stance.

    April 19, 2014

Latest news
Featured Ads
Only on our website
AP Video
Raw: More Than 100,000 Gather for Easter Sunday Raw: Greeks Celebrate Easter With "Rocket War" Police Question Captain, Crew on Ferry Disaster Raw: Orthodox Christians Observe Easter Rite Ceremony Marks 19th Anniversary of OKC Bombing Raw: Four French Journalists Freed From Syria Raw: Massive 7.2 Earthquake Rocks Mexico Captain of Sunken SKorean Ferry Arrested Raw: Fire Destroys 3 N.J. Beachfront Homes Raw: Pope Presides Over Good Friday Mass Raw: Space X Launches to Space Station Superheroes Descend on Capitol Mall Man Charged in Kansas City Highway Shootings Obama Awards Navy Football Trophy Anti-semitic Leaflets Posted in Eastern Ukraine Raw: Magnitude-7.2 Earthquake Shakes Mexico City Ceremony at MIT Remembers One of Boston's Finest Raw: Students Hurt in Colo. School Bus Crash Deadly Avalanche Sweeps Slopes of Mount Everest
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.
Obituaries