Want to wager on poker on your phone? Indiana House committee advances online gaming bill
House Bill 1432, which was approved by the House Public Policy Committee, could generate hundreds of millions of dollars in additional tax revenue for the state while regulating an activity that Hoosiers already participate in, albeit illegally, proponents said. The bill, which would be the largest expansion of gaming in the state since at least 2019, passed by a 9-2 vote.
"Hoosiers are already playing casino games online - just Google it," said Logansport Republican Rep. Ethan Manning, chairman of the House Public Policy Committee. "This is happening already. Let's authorize it, let's regulate it, let's make it appropriate, and obviously we see huge potential for tax revenue as well."
The bill expands upon legalized sports betting, which the state approved in 2019. Along with legalizing virtual casino and poker games, it would also enable the Hoosier Lottery to implement a digital lottery program, where people could play online draw games and other instant games on their phones, generating up to $94 million in profits by 2028.
The bill would have a large economic impact on the state, with legislative fiscal analysts suggesting interactive gaming could generate between about $500 million and $1 billion annually in gross revenue. It could result in tax revenues between $119 million and $253 million annually, according to that analysis, though net revenue could be lower if there are decreases at brick-and-mortar casinos, which is expected.
A lobbyist for Churchill Downs, for example, which owns a new $290 million casino resort in Terre Haute, opposed the bill fearing that it would lead to reduced brick-and-mortar casino revenues and jobs.
The state would start out taxing interactive online gaming at 26%, but eventually impose a graduated tax rate depending on the annual gross revenue of the licensee. Most tax revenue generated would support the state's general fund.
There are several other key provisions in the online gambling bill, including an increased investment from casinos in supporting treatment for gambling addictions, and doubling the annual state revenue flowing to non-host communities from $33 million to $66 million.
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Online gambling would be available for Hoosiers starting in September if the bill clears all of its legislative hurdles and is signed by Gov. Mike Braun. But that's not a sure thing: previous efforts to legalize online gambling were abandoned in the past. Then concerns about corruption after former state Rep. Sean Eberhart pleaded guilty to a federal corruption charge for influencing casino legislation meant a pause in gambling legislation in the 2024 session.
The online gambling bill is largely supported by the casino industry, as it would lead to increased revenues for companies that eventually seek such licenses.
"It represents a new way to reach out to an audience that does not necessarily today patronize our properties," said Matt Bell, a lobbyist for Indiana's casinos. "This is about growing our market."
However, an influential lobbyist representing the casino industry, John Hammond of Penn National Gaming, which owns the Ameristar casino in East Chicago and the Hollywood Casino in Lawrenceburg, spoke against the bill.
Hammond said he couldn't support the bill currently due to Penn National's opposition to another gaming bill the House Public Policy Committee approved unanimously earlier Tuesday morning. That bill, House Bill 1433, would let American Legion, VFW halls, taverns and bars carry certain electronic games.
"We do not support this bill because e-pull tabs is still a live grenade in the process," Hammond said. "It's still out there, passed out of this committee moments ago, 13-0. That's our biggest concern."
HB 1433, Hammond said, has the "potential to cannibalize the revenues" generated by casinos. Other lobbyists for the casino industry also testified against that bill.
While it wouldn't legalize electronic games like slot machines, the bill instead allows charitable groups, bars and taverns to have electronic pull-tab games, which one advocate said are essentially "a modern version of the traditional games" using paper pull tabs that are already allowed.
Rep. Cory Criswell, R-Middletown, said the casino industry's opposition to WFH halls carrying electronic pull tab games was "mind-boggling."
The casino industry is highly lucrative, Criswell said, whereas small taverns and American Legion halls would likely see much more modest profits from an expansion to electronic pull-tab games.
"It just frustrates me that (the) casino industry could come up and testify, (that) any casino could come up and testify against this, because of the e-pull tabs," Criswell said. "That's what really gets under my skin."
Earlier in the committee meeting, Criswell said the casino industry's opposition to an expansion in charity gaming was "all about money."
Meanwhile, HB 1433 was strongly supported by members of the veteran community. Mark Gullion, of the American Legion, expressed "unwavering support" for the legislation.
"Hoosier veterans have long benefited from paper pull tabs at our posts (which) ... generate revenue to support the charities and causes that are close to our hearts," Gullion said.
Currently, of the 730 American Legion posts throughout the state, most of which have some form of gaming, Gullion said.
Ron Patterson of the Fortville American Legion, said, for instance, that revenue from charity games has helped the organization support things such as repairing the electricity in a veteran's home and giving a pizza and ice cream party to fourth graders who are learning about the American flag.
"We're giving money back to our community," Patterson said. "We're helping our veterans."
A potential expansion of gambling in Indiana led to some expressing concern about its social impacts on the state.
That fear led Rep. Matt Lehman, R-Byrne, to vote against the online gambling bill in committee. He was concerned about seventh and eighth graders being exposed to gambling.
"I get that we want to make this easier, accessible for the 45-year-old guy who's got the means to do this," Lehman said. "I'm concerned on where we're going when we're allowing more and more access. Maybe it's a bridge too far for me."
Others expressed concerns about gambling addictions increasing.
HB 1432 establishes a new "problem gambling services program" to promote responsible gaming, which would be funded by 13 Indiana casinos, totaling $3.25 million. An additional $500,000 would be paid to the fund by the Hoosier Lottery. Casino operators may have to pay more annually if costs are depleted from the program, up to $2 million per year.
It would support treatment and recovery resources and services for people struggling with gambling addictions.
Stephanie Anderson, chief operating officer for Mental Health America of Indiana, said about 3% of Hoosiers are problem gamblers, and said increased access to gambling leads to increases in problem gambling.
"The language in HB 1432 would enable the necessary resources for comprehensive treatment approaches to address the growth in problem gambling," Anderson said.
Both HB 1432 and HB 1433 could be voted on by the full House chamber as early as next week.
Contact senior government accountability reporter Hayleigh Colombo at hcolombo@indystar.com.
This article originally appeared on Indianapolis Star: Want to play poker on your phone? Indiana bill would allow wagers
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