Tight budget could give boost to chances for dockside gambling

Thursday, Jan. 4, 2001 | 9:55 a.m.

But if such an initiative is to succeed in the legislative session that begins Monday, it seems likely that casinos will have to pony up more tax revenue to the state.

That became more evident this week when Rep. Scott Pelath, D-Michigan City, said he would file legislation removing the requirement that the boats cruise while at the same time increasing the $3 per-customer admissions tax to $4.

The result could be $150 million or more in new revenue for the state's two-year budget and millions more each year for the casinos.

"In recent weeks, there have been many reports about the economy slowing down and the task of writing a new state budget being more difficult than ever," Pelath said. "What I am proposing is a solution that has been proven to provide a needed shot of adrenalin, both locally and at the state level."

Under current law, riverboats are required to take two-hour cruises, and patrons aren't allowed to board during that time. If that were repealed, gamblers would be allowed to come and go at will - eliminating any meaningful distinction between riverboats and land-based casinos, in the eyes of critics.

The push for dockside gambling in Indiana got a boost last year when neighboring Illinois adopted it. That has allowed Indiana casinos to argue that they had been put at a competitive disadvantage.

Now there's a second argument - the prospect that new state revenue will be needed to help balance the coming budget.

Democratic Gov. Frank O'Bannon has said repeatedly that he considers dockside gambling an expansion of gambling, something he opposes. But he has stopped short of saying he would reject it under any circumstances.

Senate President Pro Tem Robert Garton, R-Columbus, also has been opposed, as has House Speaker John Gregg, D-Sandborn. Gregg vowed recently to vote against dockside gambling, but he wouldn't say whether he will kill Pelath's bill.

During last year's session, Gregg quashed a dockside gambling bill introduced in the House by moving it from the Public Policy Committee to the House Rules Committee, where it sat.

But that was before state lawmakers were trying to pass a budget with revenues that had fallen behind projections.

"It didn't fit as well last session," said House Ways and Means Chairman B. Patrick Bauer, D-South Bend.

Now, the Illinois dockside gambling law has been in place more than one year, so officials can compare numbers.

Since the Illinois boats were docked, their revenue growth has been about 30 percent. Meanwhile, the growth in the revenue from Indiana boats has slowed to about 8 percent, said Joe Domenico, chairman of the Indiana Casino Association.

"There's also been a huge shift in market share for the boats in northwest Indiana," he said. "Previously, Indiana with five boats (on Lake Michigan) had 52 percent of the market. After dockside gambling, that shifted. Now Illinois has 55 percent, and Indiana has 45 percent."

Bauer said industry officials already have offered to pay higher taxes in exchange for dockside gambling, but he would not be specific about the amounts.

Currently, the boats pay a $3-per-customer admissions tax to the state, plus 20 percent of their winnings. Bumping up either could bring in tens of millions of dollars more.

"That will be a factor" in the General Assembly's decision about dockside gambling, Bauer said.