Interests clash over pros and cons of dockside gambling

Thursday, Jan. 11, 2001 | 9:02 a.m.

"They have come in here and they practically have a blank check," Senate Finance Chairman Larry Borst, R-Greenwood, said of the casino industry's lobbying push for dockside gambling. "Their thing right now is, 'Indiana, you need money, and we can get you more money.'

"As I told the caucus, 'You guys do whatever you want to do. Have dockside, don't have dockside, but don't make up your mind because it's a source of revenue, because it's a poor source of revenue."'

The Casino Association of Indiana floated a study Wednesday predicting that dockside gambling in Indiana could generate $328 million in new tax revenue during the next two-year budget cycle.

Association Chairman Joe Domenico, general manager of Harrahs's East Chicago Casino, said no other proposal besides legalizing dockside gambling comes close to providing what he called "desperately needed revenue" for the state.

The group says it also is needed for the industry to stay competitive with other states, including Illinois. Casino revenues there rose sharply after the state started allowing casinos to remain dockside so patrons could came and go at will.

But the industry faces some serious obstacles this legislative session, including Democratic Gov. Frank O'Bannon's insistence that dockside is an extension of gambling, something he has repeatedly said he opposes. House Speaker John Gregg, D-Sandborn, also has said he is opposed.

Members of the Indiana Coalition Against Legalized Gambling, a grassroots group, met with a member of O'Bannon's administration Wednesday and reiterated their stance against dockside gambling.

They also told O'Bannon aide Bob Small they oppose the governor's proposal to tap $410 million in gambling proceeds over two years to pay for new education initiatives and help balance the budget.

John Wolf, a former minister and the coalition's coordinator, noted that O'Bannon told thousands of students during his inauguration ceremony Monday that Indiana should be lauded for high school standards and character education.

The statements came shortly after his administration proposed using gambling proceeds to pay for some education programs.

"The message to all Hoosier children thus becomes, 'the more craps played, the more slots played, the more gambling encouraged, the better our educational goals will be reached,"' Wolf said.

Small said he told the group the money would come from gambling revenue reserves that already exist, not future gambling proceeds. He said the state tapped gambling proceeds during tight economic times in the early '90s to help balance the budget, but stopped the practice when the economy improved.

The Casino Association paid accounting firm Crowe-Chizek and Co. to provide a fiscal analysis of the regulatory and competitive environment of Indiana's riverboat casino industry.

Under current law, Indiana's 10 riverboat casinos on Lake Michigan and the Ohio River are required to cruise when gambling is taking place, unless bad weather or other conditions prevent it.

Even if they remain dockside because of such conditions, patrons are only allowed to board at certain times.

The Crowe-Chizek study showed that by converting to dockside, state and local governments would get an average of $163 million more in annual gambling and admissions tax revenue.

The study also determined that Indiana's riverboat industry faces several challenges if it is to continue to compete in the Midwest legalized gambling market.

Besides dockside gambling in Illinois, large, land-based casinos have been proposed in Wisconsin and Michigan, and a legislative compromise in Illinois could result in another gambling venue in the Chicago area.

Rep. Scott Pelath, D-Michigan City, plans to file legislation removing the requirement that the boats cruise while at the same time increasing the $3 per-customer admissions tax to $4.

Domenico said the industry already is about the highest-taxed casino jurisdiction in the nation, and the association's official stance now is that it "would prefer not to have a tax increase."

Dockside proponents hope to get a committee hearing on the issue sometime soon.