Hoosier State Sen. Jon Ford’s bill is coming two years after the General Assembly passed an expanded gaming bill that saw the legalization of sports betting. He stated that the legislation is a natural progression for gaming in the state.
He went on…
“The language in this bill is very, very similar to sports wagering, and many of the back office mechanisms in place for consumer protection, we already have in place for sports wagering. So, really a lot of the infrastructure’s already there.”
The bill offers each licensed casino in the state the liberty to partner with as many as three iGaming providers, which is the same number of skins accessible for sports betting. A peculiar difference between the sports betting bill and that of the iGaming is the tax rate. A 9.5 percent tax is applicable on sportsbook adjusted gross revenue in Indiana, with the iGaming bill levying an eighteen percent tax on iGaming apps. Fifteen percent of that would be remitted to the Hoosier state, while the three percent left would be made available to the local government for the licensed casino in question.
The case is quite different for the brick and mortar casinos, as they are taxed on a graduated basis. Fifteen percent is applicable on the first $25 million of the adjusted gross revenue, with the rate increasing until an accumulated sum greater than $600 million is realized at 40 percent.
The Attraction of New Players
While Sen. Jon Ford’s bill is yet to be made public, the Indiana State Rep. Alan Morrison’s companion bill for the state House, HB 1406, was made available on Tuesday.
The bill estimates the iGaming taxes to accumulate between $42.9 million and 485.8 million proceeds by the fiscal year 2026, as seen on the fiscal note attached to the House bill. With an impact on retail casinos ranging from $32.8 million to $64.5 million. The estimated net profit after making provisions for fees and supplementary taxes would range between $10.7 million and $21.7 million.
Although, Sen. Jon Ford is not convinced that this will have a grave impact on the brick and mortar casinos negatively as he quoted a study from 2017 – Caesars Interactive Study, showed that 80% of its online players in the State of New Jersey were in fact, new customers.
On that he said…
“I thought going in with sports wagering, that there was a consumer we were not attracting to the gaming industry here in Indiana. And I think it’s been proven with sports wagering that there was a niche that we weren’t tapping into. I think that iGaming would appeal to that group.”
He stated that that particular demographic is made up of a younger population that does not subscribe to the brick and mortar casinos.
The Indiana State lawmakers are not only considering the iGaming bills but they are also considering the legalization of video gaming terminals in the state as a group of business organizations have been pushing for it.