The Spectrum Gaming Group’s research could be a pivotal factor in Indiana’s potential gambling expansion in 2025 or later. Despite previous setbacks, including fiscal concerns and a political scandal that halted legislative efforts in 2024, the study offers new insights. Initially commissioned by the Indiana Gaming Commission in February 2022, Spectrum’s study continued despite the legislative roadblocks.
In February 2023, efforts to legalize online casinos in Indiana were hindered by what was perceived as a misguided fiscal impact report by the Indiana Legislative Services Agency. State Sen. Jon Ford pointed to inaccuracies in the report’s financial assessment. Following this, Spectrum re-engaged in May 2023 to update its study with the latest data.
The political scandal involving former Indiana House Rep. Sean Eberhart, who pleaded guilty to federal corruption charges in November, further complicated the situation. This development led to a consensus among legislative leaders to postpone any online casino legalization in Indiana for 2024.
Spectrum’s Projections for iGaming Revenue in Indiana
According to Spectrum’s study, Indiana’s potential iGaming Gross Gaming Revenue (GGR) could reach between $410 million and $636 million in its first year, escalating to $629-756 million in the second year, and $825-934 million by the third year. These projections, averaged over three years, suggest a total GGR of just over $2 billion.
Tax revenue estimations vary based on the tax rate. At 20%, Indiana could see $98 million in tax revenue in the first year, increasing to $139 million and $176 million in the subsequent years. A higher tax rate of 45% could yield even more significant returns.
Potential Impact on Indiana’s Retail Casinos
The Spectrum report aimed to assess the impact of online casinos on retail casinos, especially after the flawed fiscal note in 2023. Findings suggest that iGaming in other states has not adversely affected other gaming forms, although it may limit the growth of retail casino revenue.
Moreover, the report anticipates that iGaming, particularly operations without live dealers, wouldn’t negatively impact direct employment and could potentially create more jobs.
The Ongoing Influence of the Corruption Scandal
The corruption scandal involving Sean Eberhart, which unfolded in 2023, continues to cast a shadow over the prospect of legalizing online casinos in Indiana. The scandal, combined with the earlier fiscal note issue, has stalled legislative progress for 2024.
Revisiting Fiscal Note Cannibalization Claims
The 2023 fiscal impact report, which warned of potential cannibalization of retail casinos by online gaming, cited outdated studies. The Spectrum report counters this, indicating that legal iGaming operations have not negatively impacted other gaming forms.
Despite the potential for significant revenue and other benefits from iGaming, Indiana faces a challenging path towards legalizing online casinos. Progress in 2024 will be crucial for any potential launch in 2025.
Indiana’s journey towards legalizing online casinos is fraught with challenges, including past fiscal misassessments and political scandals. However, Spectrum’s encouraging revenue projections and evidence of minimal impact on retail casinos provide a glimmer of hope for future legalization, potentially transforming Indiana’s gaming landscape by 2025.