Indiana proposal to legalise online gambling and lottery making progress

House Bill 1432, which was approved 9-2, would have Indiana become the eighth U.S. state to legalize iGaming, or wagering with real money at an online casino using a mobile phone or another internet-connected device from anywhere in the state.

In addition, House Bill 1433, which was approved 13-0, would permit bars, veterans organizations and charitable entities to place electronic pull tab machines in their facilities — making in-person gambling via electronic device legally accessible for the first time outside of Indiana's 13 state-regulated casinos.

The legislation also would authorize the Hoosier Lottery to sell its tickets online, including big jackpot draw games like Powerball, MegaMillions and Hoosier Lotto, as well as new, virtual scratch-off games.

State Rep. Ethan Manning, R-Logansport, the sponsor of both measures and chairman of the House Public Policy Committee that approved them, said together they will modernize Indiana's 32-year-old gaming industry by leveraging its existing assets and better positioning the state to meet future demand.

According to the legislation, Indiana iGaming would operate similar to its online sports wagering system, where the state's brick-and-mortar casinos can partner with up to three iGaming operators to offer human-drawn or electronic casino table games and slot machines for play over the internet.

The nonpartisan Legislative Services Agency projects the new taxes associated with iGaming — one-sixth of which is earmarked for each partner casino's home city and county — would more than offset any tax revenue losses from the possible cannibalization of in-person casino wagering.

The proposal also doubles to $66 million the amount of revenue sharing money annually distributed to non-casino counties and allocates millions of additional dollars for services and programs for Hoosiers with gambling problems.

The plan is supported, generally, by most of Indiana's casino industry, as well as the Hoosier Lottery. Churchill Downs, which operates the new Terre Haute Casino, is adamantly opposed, while Penn National, the parent company of East Chicago's Ameristar Casino, is opposed so long as it's paired with legalization of electronic pull tabs.

Manning insisted electronic pull tabs are not slot machines and he inserted multiple provisions into the legislation to clarify that electronic pull tabs must operate the same as paper pull tabs, including requiring players to swipe the screen or press a button to open each line of an electronic pull tab.

Nevertheless, Penn National's John Hammond suggested electronic pull tabs threaten to devalue the capital investment of Indiana's casino properties, as well as the jobs of their thousands of Hoosier employees, by putting electronic gaming in practically every town in the state.

Other electronic pull tab critics suggested the devices will be difficult to regulate, impossible to monitor the same as casinos, incompatible with Indiana's voluntary exclusion program, and will take customers away from the events, spas, restaurants, hotels and ancillary businesses associated with Indiana's casinos.

Supporters of electronic pull tabs said they will bring in new customers and needed additional funds for veterans organizations, charities and local businesses that help their communities and also provide jobs for Hoosiers.

Other provisions in the legislation include hiking Indiana's sports wagering tax to 20% for online bets, while leaving it at 9.5% for in-person sports books; mandating live dealer online table games be hosted at a studio in Indiana; enhancing efforts to collect unpaid child support from gaming jackpot winners; and improving promotion of the state's 800-9-WITH-IT gambling problem hotline.

If enacted into law, iGaming could begin as soon as Sept. 1.

Though Manning cautioned both measures are likely to be repeatedly revised, and possibly derailed, as they move through the Republican-controlled House and Senate, and potentially to the desk of Republican Gov. Mike Braun, over the next three months.

By Dan Carden