Indiana’s Commercial Operators Bemoan State’s First Tribal Casino

Posted on: September 6, 2017, 06:00h. 

Last updated on: September 6, 2017, 05:04h.

The casino landscape in Indiana is changing. The state’s ten riverboat casinos, based on the shores of Lake Michigan and the Ohio River, are begrudgingly about to welcome a new competitor to the fold.

Indiana’s casinos oppose state’s first tribal casino, Four Winds South Bend
A digital rendering of the Pokagon Band of Potawatomi Indians’ Four Winds Casino in South Bend, Indiana, which is due to open next year as the state’s first tribal casino. So far, the tribe has shown no interest in negotiating a compact with the state. (Image: Four Winds South Bend)

The state’s first tribal casino, the Pokagon Band of Potawatomi Indians’ Four Winds Casino in South Bend, is expected to open in early 2018. But the commercial casinos are aggrieved that the Potawatomi will pay no gambling related taxes, or any contributions to the state via a compact, complaining this gives them a leg up on the competition.

“They are good operators,” Matt Bell, said executive director of the Casino Association of Indiana (CAI), of the Potawatomi, which operates three casinos in Michigan. “They would be a rival with a level playing field, but the field is not level,” he told Indiana’s Journal Gazette.

“They can pump a lot of that money into marketing through promotional free play. It allows them to market far more aggressively than Indiana casinos can today.”

The tribe has opted only to offer Class II gaming in Indiana, which means it is under no obligation to negotiate a revenue share-deal with the state, as it would have to do if it wanted to offer Class III table games and slots.

Nor will it be required to pay 35 percent tax rate on gross gambling revenue, levied by Indiana on its commercial casinos.

Class II on a Grand Scale

But despite the lack of Class III gaming, the Four Winds will be the biggest casino in the state, and existing casinos are worried that customers won’t be able to tell the difference between their class II gaming machines from bona fide slots.

“The simplest way to put it is that the math behind determining the outcome of a Class II game is different than with slot machines,” said Sara Gonso Tait, of the Indiana Gaming Commission. But, she added, “players may not be able to tell the difference between a Class II gaming device and a slot machine as advancements in the technology of Class II gaming devices have become quite sophisticated.”

Research by the Spectrum Gaming Group, commissioned by the CAI, concluded Indiana’s casinos existing could take an $800 million hit in the first five years from the new tribal casino, which would leave state coffers $350 million poorer, although CAI has a vested interest in proving this, of course.

 Evolutionary Steps

It’s not all bad, though. The riverboat casinos are slowly crawling onto land, thanks to legislation passed in 2015 by the Indiana General Assembly.

The first to crawl from the evolutionary swamp is the Tropicana Evansville, whose $50 million land-based casino will open next month, after 20 years on the water.

“It’s appropriate, us being the first casino in the state of Indiana and it’s appropriate for us to be the first ones to take advantage of the new land-based legislation,” said the casino’s General Manager John Chaszar.

Indiana’s casinos are also still rejoicing after lawmakers voted in May to eliminate the longstanding $3 admission tax they have been forced to pay for each customer entering their casino floor.