Final night of session revives push for oversight of Gameboys
While it seemed as though language restricting funding flexibility for the Indiana Gaming Commission – and no other state agency – was dead after Rep. Jeff Thompson (R) of Lizton removed it from SB 256 in the Committee on Ways and Mans which he chairs during the final few days of legislative activity before the measure passed the House (with no questions about why the language had been excised) . . . as readers of this newsletter have learned over the past 31 years of publication, nothing is dead until both chambers adjourn sine die (and even then, sometimes little gems – intentional and unintentional – are not infrequently later discovered).
Here, a conference committee for SB 256 reinserted the language that had – without any discussion of the gaming-related language and only a modicum of explanation – unanimously passed the Senate earlier in session. That conference committee action was announced late in the afternoon in the final hours of Friday, March 8, the final day of session.
The move came without any public debate on the resurrected language.
SB 256 was then quickly run by the House Committee on Rules for approval in the early evening of that Friday where it passed on a party line vote. After the House rules report was physically run downstairs to the House chamber, debate quickly commenced on House concurrence . . . and it passed overwhelmingly, with 11 Republicans joining all the Democrats in the final vote. The Governor then signed HEA 256-2024 on March 13, the day after it reached his desk.
We’ll walk you through the maneuvering and nuances at play here.
Recall that all of this controversy arose as a result of a solution sought by Senate Majority Floor Leader Chris Garten (R) of Clarksville to a concern that he surfaced publicly late last year in the State Budget Committee on which he serves (along with the other majority and minority legislative fiscal leaders and the state budget director): That too many casinos were being fined too much, too frequently, for matters with too little significance, and were in a position of subservience to the Indiana Gaming Commission that left them effectively powerless to challenge the fines. Sen. Garten offered evidence that the fines were far in excess of those levied by other jurisdictions . . . though there were some questions about the comparability of his statistics.
The objections (and defenses) that were raised in the final hours of session were both procedural and substantive.
Procedural Issues
Moratorium on Gaming Legislation
Democrats contended that Senate President Pro Tem Rodric Bray (R) of Martinsville and House Speaker Todd Huston (R) of Fishers had made it clear at the outset of session that there would be no new gamin legislation this session as leaders waited to learn the outcome of what was expected to be a mid-session (February 14) sentencing of former Rep. Sean Eberhart (R) of Shelbyville, who pleaded guilty to federal charges of “conspiring with others to solicit and receive the promise of future, lucrative employment with a gaming company in exchange for his support of legislation beneficial to the gaming company,” according to the Office of the U.S. Attorney for the Southern District of Indiana . . . and while no other charges have been forthcoming, a grand jury is said to remain active, and many have noted that you can’t have a “conspiracy” of just one.
While sentencing was later delayed until the end of April, there was no change in the public pronouncements of leaders, and the major iGaming bill (which included iLottery and video gaming terminal provisions) to be authored by Rep. Ethan Manning (R) of Logansport, the chair of the House Committee on Public Policy, that was expected to be considered this year was sidelined – not even introduced despite bill drafts circulated discreetly before session.
“[W]e we were told we would have no gaming bills this session,” observed Rep. Matt Pierce (D) of Bloomington. Rep Pierce posed this rhetorical question to Rep. Thompson during Rules committee discussion: “How does this fit into the speaker who announced at the beginning of the session that in light of some of the unfortunate revelations about a former colleague of ours, that there would be no gaming legislation this session?” “This has nothing to do with it,” Rep. Thompson responded. “This strictly deals with the fines and fees and how those are expended, nothing more.”
Not Reviewed in the House due to Lateness of the Move
Democrats raised concerns that the offending language was never reviewed in the House. Rep. Thompson even led off discussion in the Rules panel by acknowledging that the language in question “was in the Senate passed version. We took that out in Ways and Means. And the conference committee report sticks that back in.” “[N]ow at the last minute, we got this conference report reviving this language, which wasn’t even heard in the House,” Rep. Pierce noted in House rules during the first mention of this situation.
Rep. Ryan Dvorak (D) of South Bend, a member of the Committee on Rules, entered into a dialogue with Rep. Thomspon on the House floor about SB 256.
“I feel I need to ask, so we have some clarity,” Rep. Dvorak began. “Where did this specific language come from?” Rep. Thompson reminded him that “It was in the Senate-passed version. I believe it passed 40-some to five or six. I forget that was in the introduced bill.”
House Majority Floor Leader Matt Lehman (R) of Berne closed debate on the measure on the floor by effectively responding to Dvorak’s concerns: “I want to be clear about something. I think we’ve been talking about what’s in this conference committee, what passed, etc. This language that’s in this conference committee report is identical to 256 as it came out of the Senate. Identical. Passed the Senate, 49-0.”
Is this Just the Concern of One Lawmaker?
Democrats tried to pin all of the responsibility for the commission-related language on one solon: Sen. Garten, hinting at ulterior motives without ever detailing what they might be and why he could be harboring them.
Rep. Pierce kicked off this line of thought in Rules, telling colleagues. “[I]f you look back, we’ve had one particular member of the (State) Budget Committee who last summer bitterly attacked the Gaming Commission and what they were doing, and was completely on the side of the industry,” he said.
Later, on the House floor, Rep. Dvorak pushed the Ways and Means chair on “who is insisting it be in the CCR (conference committee report)?” Rep. Thompson told him it was “The author of the bill.” When Rep. Dvorak asked who the author was, Rep. Thompson blanked and someone interjected that it was Sen. Garten – before Speaker Huston intoned from the rostrum that it was, in fact, Sen. Ryan Mishler (R) of Mishawaka, chair of the Senate Committee on Appropriations, who authored the bill. “And did anybody else talk about in amongst the conferees, did any of the other conferees talk about making changes to this language?” He continued, “So who – and again, I feel like we need to be specific, given what’s happened, where exactly the language changes came from.” Rep. Thompson educated him that “Initially it was in the Senate version, and in Ways and Means we removed it and then it went on, of course, through the process. A lot of amendments here. And then it’s come back in. And that’s very typical,” he told Dvorak, who has served for 22 years (following 16 years watching his father in the same seat), four fewer than Thompson – whose father had earlier served in the Senate. “That’s really common that things that are taken out at some point come back in in conference committee. Not at all unusual.” Rep. Dvorak fired back: “It’s not unusual for that to happen in conference committee. But it’s also unusual that a member is awaiting federal sentencing for language in conference committee relating to gaming. And so that’s why I feel it’s important that we be incredibly specific about this.” “It’s totally unrelated,” Rep. Thompson assured him. “There’s no relationship.” He also reminded Dvorak that the bill had originally passed committee and the floor in the Senate without a single negative vote being cast.
Substantive Issues
Need to Maintain Public Confidence
Democrats pointed out that the optics seemed to be a bit distorted given that two former lawmakers served time in federal prison since the last short session, and one more was preparing to be sentenced for conspiracy charges related to bribes from the gaming industry.
“This bill is just bewildering – bewildering to me,” Rep. Pierce asserted in Rules. “We’ve got one former colleague who I think is on the way to prison. We’re kind of waiting for other shoe to drop, because there’s some suggestion that maybe other people are involved in some way … and at the very same time we have that happening, we now have a bill come forward that is now going to create hurdles for the agency that oversees gaming businesses in the state from getting the resources they need to actually enforce their regulations. So this bill is essentially a gift to the regulated community in the gaming world,” Pierce suggests. “I think this is an attempt to strangle an effective regulatory agency on behalf of an industry that right now is embroiled in scandal. And I think it’s outrageous for this bill to be moving forward.”
Rep. Dvorak picked up on Pierce’s theme a few moments later. “We have a really unfortunate situation there that our former member of this body is awaiting federal sentencing for participating in what was improper legislative influence in the gaming industry. And this specific provision that we’re talking about actually intentionally says we want to put more legislative influence on the one agency we’ve empowered to actually regulate and enforce the rules on the gaming industry.”
House Committee on Rules Chair Ben Smaltz (R) of Auburn, who rotated into that post after chairing the House Committee on Public Policy for several years (the landmark 2019 legislation that is the subject of federal investigation passed through his panel), took up the defense of the conference committee report.
“I think I’d respond, and I think my reputation as public policy chair and my position on gaming – I took a pretty, pretty stern view on language that came through in gaming. And I’m sitting here wondering, and maybe you can help me. But for our previous colleague who was caught and enforcement is being, being put upon them, what other calamities are happening in the gaming industry? Can you name something?”
Rep. Pierce told him. “I’ll take a shot at that. So you’re right, we don’t we know of (more than) the one former member. And there’s indications that other individuals are involved in that particular scandal. And we’re waiting to see when the feds might issue further indictments or reveal what’s happening there. And I admit, it’s been a little longer than I expected for that to come to light. So we know something was up there. And so what was the nexus of the bad behavior is that the legislature had the ability to make rules about gaming that could make some people rich, and maybe some other people not so rich – right? And so there was an attempt to influence that through illegal behavior, apparently.”
Pierce continued, “And now a bunch of legislators are going to decide whether that agency should have the resources to bring a specific action. So now you’ve got legislators who already have one example of improper influence – have put themselves right in the middle of the enforcement actions of that agency. That is going to create an opportunity for corruption. And, you know, we miraculously for decades didn’t have any scandals or any corruption in the area of gaming. And we’ve had one blow up in our face here recently, and we were told we would have no gaming bills this session. And now at the last minute, we got this conference report reviving this language, which wasn’t even heard in the House, that’s going to give all kinds of chokeholds on the gaming industry. And so that’s why I think we need to reject this conference report, go back, take out the gaming provisions.”
Rep. Smaltz returned serve. “I don’t think there’s any intent – and I don’t think you’re trying to declare intent – to make things easier for any sort of malfeasance to happen. I think you were very right when you said we’ve been many decades without any sort of issue at all. When an issue did arise, that person was caught and is being punished. I do know that, you know, there’s – we’ll see what happens when that when that punishment is handed down in federal court. But I don’t see a gaming industry amok. I don’t see the, the, you know, some sort of malfeasance. I just don’t see that. And I, in my well-established position on being cautious with gaming, is it should be unimpeachable.”
Rep. Smaltz finished the debate. “I’ve always watched very closely on gaming. I just don’t see the industry as in some sort of dire straits. I don’t see that this is going to make it so the industry is going to be able to pull the wool over anybody’s eyes. And I do appreciate the additional oversight. So I think you and I just have a fundamental disagreement (over) what is what is the situation with gaming today? And I think that’s fair. I mean, we both are allowed to have our – what we perceive to be true.”
When the debate hit the House floor a few minutes later, Rep. Ed DeLaney (D) of Indianapolis, who had been the first lawmaker to raise concerns over the Mishler and Garten actions related to Indiana Gaming Commission oversight, cut loose.
Rep. DeLaney asked rhetorically, “So what are we doing here?” Has anybody noticed that one of the finest lawyers in Indiana, a former member of this place, John Keeler, has been subjected to criminal findings in the court and I believe has gone to federal prison. Probably one of the finest lawyers I ever met. One of the most honest and open who got involved with the gaming industry. Okay. And another member whom we all had great affection for is now pending on charges. Maybe that’s why the speaker and the president pro tem said before this session that we were to stay out of gaming.”
He continued, “We are constantly competing with our friends in Illinois saying we’re better, our taxes are better, our schools are better, our pensions make more sense. Well, now we’re going to compete to go to the bottom of the list of states that have gaming. I call this the ‘Blagojevich Law.’ Okay. That’s the kind of action they’ve had in Illinois. And that’s the kind of action that’s threatening here. And as brother? Dvorak points out, we have to twist and contort the Indiana Constitution and turn ourselves into an agency, and then choke off the agency. This is not what we should be doing in Indiana. So if you’re interested in openness in government, first vote this down and let’s get back what you unanimously voted for [in SB 256 dealing with oversight related to the $1 billion Medicaid shortfall]. And then let’s get our hands clean of this mess with the gaming industry. It is a highly regulated, highly important industry, highly dangerous to every person in this building. Okay, we all know that. We need to keep them at arm’s length. We don’t need them lobbying the Budget Committee as to whether they can have a worthy opponent, whether the state can have a decent lawyer, a competent lawyer to represent them. We don’t need any of that. You (the supermajority) were right when it was said that we wouldn’t get into gaming. Get out of it. Vote this down.”
After the session adjourned sine die, Rep. DeLaney issued a statement simply saying, “At a time when a recent legislator and the gaming industry are under federal criminal investigation, we should not be crippling the entity responsible for oversight.”
Rep. Pierce took to the floor to reprise his Rules panel mantra. “This provision about the gaming commission is bewildering. You know, for 20-plus years or longer – however long we’ve had gaming in this state – we’ve had a remarkable record of no corruption, of no problems. And we were known – and I think may still be known – for having a very good gaming commission that keeps very careful tabs on what operators are doing and make sure they don’t go astray. And then, you know, sadly for all of us, one of our former colleagues is now likely to be going to prison because of entanglements with a gaming operator. And my sense from reading – because all I know is what I read from news reports about it – is we’re kind of expecting for some other shoes to drop. We don’t know when. So at a time when the public’s confidence, I think, is being shaken about the legislature’s relationship with the gaming industry at this very moment in time, what are we doing here?”
Pierce adds, “Why in the world – when (for) the first time in decades we now have scandals involving legislators and the gaming industry – would we pass a bill that injects legislators directly into approving enforcement actions? This is bad. We’re asking for trouble. And we’re undermining the confidence of the public in this body and in the Gaming Commission. And for what? What has gone wrong? What problem is being solved? What public policy is being advanced?”
Rep. Pierce answered his own questions. “Apparently, we just think the Gaming Commission’s been too hard on the gaming operators. They’ve been too mean to them. So we’re going to take care of that. We’re going to make sure we downsize their resources, and we’re going to make sure that whenever they need extra money, they’re going to have to come and beg a Budget Committee full of legislators to get approval to do it. That is bad public policy. And you have the ability right now to stop that. You don’t have to go along with this …. I would just ask you to not put in jeopardy, or injure any more, the public’s confidence in his body when it comes to our interactions with the gaming industry, and we not place legislators directly, potentially in enforcement actions. Please vote this down. You will regret it if you approve this,” Pierce concludes.
That brought Rep. Smaltz to the microphone on the floor to reiterate what he had just said to his Rules committee, reminding them that “most of you know that I was chairman of public policy for quite some time, handled a lot of gaming issues, very familiar with the industry. And the first thing I want to say is that
we have an exceptional gaming commission. That is my opinion. I have worked with them. I think they do a good job. I think they’re tasked with a difficult job. But I also want to make the point that I’m not aware of as an industry, any other operator, any other instance – and I think my point is, was made for me (by Rep. Pierce) – for decades of any sort of wrongdoing in the gaming industry.”
He continued, “I think the Gaming Commission is doing an excellent job. I think that the gaming industry is operating well in the State of Indiana. I just would be remiss if I didn’t come up here and defend the industry as a whole, because there’s nothing else going on. Yes, somebody got caught. You know what? They got caught. You know what? They’re in trouble. You know what? They’re going to prison. Who knows? I don’t know, they got caught. Nothing else out there right now that I know of. You know of it? I’d like to know. But it’s oversight. That’s what we’re doing. It’s watching. And that’s important to me” Rep. Smaltz concluded.
Rep. Dvorak opted to continue the debate from Rules on the House floor, telling the full House, “the concern I think we all should have is that we can’t know specifically where this language comes from, but we can know what the effect is. The only possible effect of this language will make it more difficult for the Gaming Commission to enforce actions against the industry. So the question you need to ask yourself is ‘who benefits?’ When we have literally in front of us? Rep. Smaltz said that we don’t have any evidence of any problems in the industry. We have direct evidence. We have a guilty plea that the industry is involved in bribing members of the legislature. That is serious, and I am not impugning the integrity of any member of this body, but it is a definite concern that we have the obligation to our constituents to have.”
House Democratic Leader Phil GiaQuinta (D) of Fort Wayne piled on with a different perspective. “[T]he fear that I have is that anytime we start to loosen up oversight that’s been mentioned here for the Gaming Commission to be able to do their job and do it well, we’re going to lose the confidence – the customers are going to lose confidence – in Indiana gaming. And what are they going to do? They’re going to go to those other states. We rely a lot on this revenue, folks, for our budget, for all the things that, you know, what the gaming revenue goes toward. And so any time we start to loosen up any, any type of regulation like we are now or, or the enforcement that’s been mentioned, I’m just afraid what’s going to happen, these customers are going to go someplace else. They’re going to go to these other states, take their gaming dollars with them, and Indiana is going to be the biggest loser for it.”
Amounts to Defunding the Police; Hampering Enforcement
On the House floor, Rep. DeLaney points to one aspect in particular that he finds “disturbing. What it does is it defunds the gaming police. Can I say that again? You are defunding the gaming police. You’re saying they can’t conduct an investigation, defend a lawsuit, defend a regulation without coming before the State Budget Committee for approval?” After a member on the majority side of the aisle interrupted with derisive clapping, DeLaney continued, “I see applause. One member thinks that’s great because he wants to defund the gaming police. I can’t believe this body wants to do that.”
Rep. Smaltz debunked that argument, telling colleagues “the industry pays for the costs of enforcement, the industry pays that. The Gaming Commission handles (it). The industry pays. So it’s not as though all of the money is evaporating and going away, and the Gaming Commission is going to be defunded and can’t operate. That’s not happening at all.”
After the measure passed, Rep. DeLaney issued a news release claiming that “Republicans are defunding the gaming commission so that it cannot do its job.”
“The gaming commission has helped uncover corruption and self-dealing in the industry and needs to maintain its ability to do that work. Defunding the gaming police will do nothing to build confidence in the integrity of our casinos and online gaming among voters, or among gamblers.
Is More Money Needed, and is BudCom Intervention Problematic?
Democratic opponents to the gaming language in SB 256 sought to portray as inappropriate and unworkable the requirement that the Gameboys appear before the State Budget Committee to request any needed budget supplementation.
The legislators against the change suggested that the agency may continue to need additional cash to keep the industry in line; the same solons who passed the initial agency appropriations would sit in judgment of the new ask; that they would be susceptible to gaming industry lobbying; there were no standards for approval of a budget hike request; and any augmentation would entail a potentially serious time delay.
Republicans backing the change suggested that the agency was always sufficiently funded; reminded Democrats that the industry largely pays for investigations; the Gameboys would not be coming to the panel hat in hand, begging for dollars; the new requirement was not a constraint but appropriate exercise of the oversight function; and approval of any supplemental requests would likely be perfunctory.
In the Committee on Rules discussion, Rep. Thompson outlined for Rep. Pierce the core change: “What we do is in place of having augmentation, they have to actually … come before Budget Committee” if they want an appropriation for “anything above” their regular appropriation. “And so we’ll have control of that in terms of spending above that.”
Rep. Pierce then ran through the Thompson explanation to make sure he – and panel embers – understood the implications. “So they no longer can just get their budget augmented, I guess, by the administration, when they need. If they have a particularly expensive enforcement action, they’ll have to come and seek the permission of the Budget Committee in order to enforce their regulations?” Rep. Thompson clarified that “They have to come in and talk to the Budget Committee. Sure will.”
“Okay,” said Rep. Pierce, who then turned his attention to fines. “And was there something else in there about the fining authority and where that money goes, or is that something different?” Rep. Thompson told him, “I believe that goes to the General Fund now, if I’m not mistaken, okay. So that would be my take.” Rep. Pierce then continued, “Yeah. So am I correct that under current law, the fines that are assessed on gaming violations currently now flow to the agency which they can use for further enforcement, but this bill will now direct that to the General Fund. And then they will have to come to the Budget Committee and beg for the money they might need to enforce their regulations? Rep. Thompson chose an interesting answer: “Maybe an ongoing discussion of more in that agency, to be blunt.”
The bottom line for Rep. Thompson was accountability: “[I]f there’s expenditures, who’s controlling that? And at some point it should be the agency or should it be the General Assembly? I contend it should be us.”
Rep. Dvorak wasn’t persuaded by that school of thought. “So just to clarify, in your opinion, will this make it more or less likely that the agency will be able to take enforcement actions?” There’ll be no change,” insisted Rep. Thompson. “No change at all?” asked an incredulous Dvorak. “When they do augmentation, now, isn’t that mainly for hiring like outside counsel for enforcement actions?” Rep. Thompson acknowledged that was the case, but observed that “I at least – I’m chair of the Budget Committee. If it’s reasonable, I’m going to approve that. That’s easy to approve.”
Rep. Dvorak remained skeptical. “So I’m just trying to understand why this would be necessary for this specific agency. Do you not trust the agency’s – I mean, is there a reason for us to not trust that the agency is appropriately doing enforcement actions? And why would we do this for not any other agency?”. Thompson answered, “Well, I think it’s a key when the kind of dollars they receive is – at least we have some oversight. And I think it’s appropriate with the kind of dollars, that at some point the Budget Committee have review of that.”
Rep. Pierce then picked up on Dvorak’s line of questioning. He began by bluntly stating that “this bill is essentially a gift to the regulated community in the gaming world. And I know Rep. Thompson said, that he thinks it’s a ‘no-brainer,’ and they’ll easily have approved whatever they reasonably need to enforce their rules. But, you know, we had a situation where the Budget Committee wouldn’t even schedule on the agenda a review of the Gaming Commission, which was necessary for them to continue in some form. And it really wasn’t until the Democratic
members of the Budget Committee started asking, ‘Why is this never on the agenda?’ And the media began to ask questions, and it suddenly showed up on the agenda. And then you had a member of the committee from the Senate railing on the ‘outrageous enforcement actions of the Gaming Commission,’ and now you’re telling me that they’re easily going to get what they need? I am very doubtful. I don’t believe it. I think this is an attempt to strangle an effective regulatory agency on behalf of an industry that right now is embroiled in scandal. And I think it’s outrageous for this bill to be moving forward,” rep Pierce concludes.
Rep. Smaltz, chair of the Rules panel, came to the bill’s rescue. He asked Rep. Thompson to “talk to the point that was just made about enforcement and who pays for enforcement? Is that a state fund that pays for enforcement, or does the industry actually pay for that enforcement? And would the Budget Committee be overseeing that in the first place? Rep. Thompson told him he was “Right. Right now there, of course, is some fines and fees, and I believe also an appropriation, if I recall. And so you have augmentation by default because of that, those fines and fees. And this puts additional dollars in for the Gaming Commission. We in essence, we appropriate it through this. And then if they need additional (funds) they come and put it on the Budget Committee review.”
Rep. Smaltz then turned to other funding sources for the Gameboys. “So I just want to be I want to understand – I feel as though the industry, if I remember my time on Public Policy – that the industry funds their enforcement, that is, that is their bill to pay. That’s not the state’s bill to pay.” Rep. Thompson replied, “That’s basically true. I believe there is probably enough. But if they’re going to be short at some point, the State could step in too.” “And if they were short,” Rep. Smaltz interjected, “do you think that they would know that they were short, with enough lead time to be able to meet with the Budget Committee to get the funds that they need to enforce and regulate the industry?” “Yes, I do,” said Thompson, answering a Smaltz query about how often the panel meets by saying, “Well, last year, probably every couple of months was probably the norm. It’s about every 60 days, every 60 days. We’re going to meet here sometime in the next month.” “And so you feel that that’s agile enough that should the funds that they already have for enforcement,” Rep. Smaltz asked, “should those come short that that you’d be agile enough with the Budget Committee to be able to fund that, to make sure that the industry is properly regulated?” “Yes, I do,” said the Ways and Means chief. “And enforcement is happening?” asked Smaltz. “For sure,” he was assured. Rep. Smaltz then close that line of inquiry: “Okay. I just I wanted to make sure of that. That’s important to me, for certain.”
Rep. Pierce then stepped back up to attack the conference report. He sought to characterize as “the final strangulation step” that “you make them come in to the Budget Committee and beg for additional money they might need – and from legislators, when we’ve already had one documented example of a legislator being improperly influenced. And so what this does is this opens the door for more of that potential activity. And that’s what concerns me. And particularly when if you look back, we’ve had one particular member of the Budget Committee who last summer bitterly attacked the Gaming Commission and what they were doing, and was completely on the side of the industry.”
Pierce persisted with that line of attack. “So now that board with that member, the Gaming Commission is going to have to come with their hat in hand and say, ‘May we please have some additional money to enforce our regulations?’ And now a bunch of legislators are going to decide whether that agency should have the resources to bring a specific action. So now you’ve got legislators who already have one example of improper influence – have put themselves right in the middle of the enforcement actions of that agency. That is going to create an opportunity for corruption,” he asserted.
Rep. Smaltz was last to speak before he called for a vote on the conference report. “I think I’d take the other position that I appreciate what you would say is a choke or a strangle, I would say is additional oversight. I would say that the Budget Committee is available. I think that I don’t think there’s any intent – and I don’t think you’re trying to declare intent – to make things easier for any sort of malfeasance to happen. I think you were very right when you said we’ve been many decades without any sort of issue at all. When an issue did arise, that person was caught and is being punished.”
When SB 356 reached the House floor less than an hour later, Rep. DeLaney was first, as we noted above, to step up and lambaste the reversion of fines and fees and removal of routine administrative augmentation insertion of the State Budget Committee into the process.
DeLaney tells Thompson, “You’re saying they can’t conduct an investigation, defend a lawsuit, defend a regulation without coming before the State Budget Committee for approval?” He then serves up “an example of what they’ve been doing in the past when they were able (to gain administrative authority for budget supplementation). I’ll give you several examples when they were able to use their money to protect themselves. Okay, they used it for contracts. In one case, they used the money to defend against big-time law firms that were suing them over emergency rules. Big-time law firms were hired by outsiders — the gaming industry – to say that these emergency rules were invalid. And in order to have arms to defend themselves, the Gaming Commission hired outside lawyers. I’ll give you the contract number, okay? 54368. That’s the contract number with a very fine Indianapolis law firm. That’s one. What else have they done with money that they were allowed to use? The next contract is 50159. A different contract. Oh, it was about Spectacle Entertainment Group’s suitability and compliance. Spectacle Entertainment. That rings a bell, doesn’t it? That was the folks that got kicked out of the industry, and tried to make some maneuvers about the Terre Haute license. Okay, so it was necessary to provide an outside counsel to do that. All right. That’s the second that couldn’t happen anymore, unless the people on the State Budget Committee – who seemed to be very, very concerned with keeping things quiet – unless they approved it. Okay. The next one, contract number 49603 – oh, the contractor was getting paid by the Commission in relation to the financial and suitability investigation concerning licensee Majestic Star Casino and its related entities called Spectacle Gary and Spectacle Entertainment. The commission had resources and was allowed to use them, and was allowed to decide whether or not those enterprises were behaving properly. The next one is number 60253, yet another contract that the Gaming Commission was able to use to hire competent lawyer to defend itself. Okay. Oh, and this one, it was alleged by some outside gaming industry, that the Gaming Commission had awarded a certificate of suitability to a competitor in the Vigo County casino, opening in a week or two. The plaintiff said that the Gaming Commission erred in awarding the certificate. The plaintiff also said that the Gaming Commission had violated the Indiana Open Door law. Again, the Gaming Commission was able to defend itself and hire competent counsel.”
DeLaney eventually concludes, “let’s get our hands clean of this mess with the gaming industry. It is a highly regulated, highly important industry, highly dangerous to every person in this building. Okay, we all know that. We need to keep them at arm’s length. We don’t need them lobbying the Budget Committee as to whether they can have a worthy opponent, whether the State can have a decent lawyer, a competent lawyer to represent them. We don’t need any of that. You were right when it was said that we wouldn’t get into gaming. Get out of it. Vote this down.”
Rep. Pierce then walked to the front of the chamber to question Rep. Thompson on the House floor.
“So fine money that would be available to them to use for enforcement will now just go to the General Fund, okay? And then the second thing, if I understand correctly, is currently the Gaming Commission has augmentation abilities, right? And so I guess that just means what they ask the administration ‘We need some additional funds,’ and then it’s up to the budget director, someone, to decide if they will get that extra funding. Is that how augmentation works?” “Yes,” agreed Rep. Thompson “And they do gain an appropriation as should.” “Okay, and so they have an appropriation,” Pierce continued. “And then so now they don’t have the fines and forfeiture money coming in, so they have less revenue there. They can’t just get augmentation if they find they need more funds because they’re in some huge lawsuit with expensive lawyers. So then they would if they need to get additional money over the appropriation, they would then have to come to the Budget Committee. Is that correct?”
Rep. Thompson was not willing to concede this point. “Well, first of all, they may have more than they need because the appropriation may not even be needed. And so if they need more than the appropriation listed here at that point, they could ask for the Budget Committee review.” “Okay, and so the Budget Committee would have to approve that additional funding, right?” asked Pierce. “And when they come forward, are they going to have to say, ‘Well, we’re in the middle of this lawsuit with this particular operator, and we’re going to run short on funding to pay our lawyers unless you give us more, so could you help us keep this lawsuit going?’ Would that be the level of specificity which would be expected in order to get the approval?” Rep. Thompson told him “It depends on the situation. You know, if we they bring it forward and it’s reasonable, I feel safe in saying it would be approved.”
“Okay,” concedes Pierce, “But they would have to basically say we are in an enforcement battle with some operator or they’re suing us or something. And so they would have to be very specific about what they’re spending that money on in order to get it approved. Is that – “ “Not necessarily, interrupted Thompson. “And by the way, most agencies have an appropriation that it is kind of in place and that’s the norm in augmentation. They okay.”
Rep. Pierce then spoke on the report. “This provision about the Gaming Commission is bewildering.” He spoke about the industry and the legislature and recent legal concerns, and continued by asking, “at a time when the public’s confidence, I think, is being shaken about the legislature’s relationship with the gaming industry at this very moment in time, what are we doing here? The first thing we’re doing is we’re strangling or cutting off the resources force that have normally been flowing. So we take away the fine money, we take away the augmentation, and then we say, if the appropriation that has been come up with is not enough, you have to come and beg the Budget Committee to fund whatever enforcement action you need more money for. Now, this is the very same budget committee that delayed putting the Gaming Commission’s rules approval on their agenda. And it wasn’t until some people on this side of the aisle started asking questions about, ‘When are we ever going to see the approval of those regulations?’ And the press and the public began to ask questions and it showed up finally on the agenda. Now, when the Budget Committee – which we now, if we adopt this conference report – is going to get to decide whether or not to fund individual enforcement actions, if the appropriation doesn’t hold – that’s the very Budget Committee who’s had members read aloud anonymous complaints from casino operators to the head of the agency, and berate that agency for being too hard on the industry, an industry of which had a few – fortunately, only a few, maybe one, – people involved in a scandal. Why in the world when the first time in decades we now have scandals involving legislators and the gaming industry, would we pass a bill that injects legislators directly into approving enforcement actions? This is bad. We’re asking for trouble. And we’re undermining the confidence of the public in this body and in the Gaming Commission. And for what? What has gone wrong? What problem is being solved? What public policy is being advanced?”
Rep. Pierce answers his own question. “Apparently, we just think the Gaming Commission’s been too hard on the gaming operators. They’ve been too mean to them. So we’re going to take care of that. We’re going to make sure we downsize their resources, and we’re going to make sure that whenever they need extra money, they’re going to have to come and beg a Budget Committee full of legislators to get approval to do it. That is bad public policy. And you have the ability right now to stop that. You don’t have to go along with this. A simple ‘no’ on the board, a simple ‘no’ against this conference committee report. They can go back, they can take out the gaming provisions. We can pass the rest of it. We’ve got plenty of time to do that. As a matter of fact, we have until next week if we want it. But we can get that done tonight. We’re good. So I would just ask you to not put in jeopardy, or injure any more, the public’s confidence in this body when it comes to our interactions with the gaming industry, and we not place legislators directly, potentially in enforcement actions. Please vote this down. You will regret it if you approve this,” Pierce warned his colleagues.
Rep. Smaltz, the most recent former chair of the House Committee on Public Policy, took to the podium to refute the Pierce line of thought, also reiterating and expanding upon some of the arguments he delineated in his own Rules panel.
“I should also mention that the industry pays for the costs of enforcement,” Rep. Smaltz told the House. “The industry pays that. The Gaming Commission handles. The industry pays. So it’s not as though all of the money is evaporating and going away, and the Gaming Commission is going to be defunded and can’t operate. That’s not happening at all. I think what’s happening is, if there is an instance where the Gaming Commission utilizes and uses all of their funding in an investigation, and they need more money because it’s that serious of an investigation, wouldn’t we want to know that beyond an augmentation? Wouldn’t we want to have some oversight? Wouldn’t we, as the policy makers that make the rules for the casino industry and the gaming industry, wouldn’t we want to know that?”
Left unsaid was that lawmakers had a few days earlier passed HEA 1235-2024, legislation retroactively (to 1999) barring any local unit of government from filing legal action to hold gun companies legally responsible for the design, manufacture, import, export, distribution, advertising, marketing, sale or use of their products, and putting a decision on filing any such lawsuit in the hands of the Office of the Attorney General. The passage of the law some 25 years after the City of Gary’s pending lawsuit against firearm manufacturers means that the legal action is s subject to dismissal (the new law took effect immediately upon its March 14 signing).
Rep. Smaltz continued, “And doesn’t the Budget Committee meet often enough? So if that were to happen, I mean, these expenses don’t just drop out of the clear blue sky. There’s going to be time where the Gaming Commission is going to say, ‘Oh, this is going to be a big one. We’re going to need to have more funds. We’re going to have to take it to the Budget Committee.’ That’s not begging. That’s we’re making sure that the funding is available. It’s not strangling; it’s oversight. And I think that’s important for what we do. And I think the Gaming Commission is doing an excellent job. I think that the gaming industry is operating well in the state of Indiana. I just would be remiss if I didn’t come up here and defend the industry as a whole, because there’s nothing else going on. Yes, somebody got caught. You know what? They got caught. You know what? They’re in trouble. You know what? They’re going to prison. Who knows? I don’t know, they got caught. Nothing else out there right now that I know of. You know of it? I’d like to know. But it’s oversight. That’s what we’re doing. It’s watching. And that’s important to me,” Smaltz concluded.
Democratic Leader GiaQuinta told members, “I’ve spent a lot of time as well as former ranking member of Public Policy. I agree with Rep. Smaltz the Gaming Commission, they do an excellent job, but they need the tools. They need the funding and everything that they currently have to do their job, and do it well. I urge you to vote no on the bill,” he said in closing his remarks.
Final Vote
The final House vote on the measure at 7:27 p.m. on the final night of session was 57-39, with 11 Republicans joining all Democrats (who voted – save Rep. Kyle Miller (D) of Fort Wayne) in opposing the final conference committee report.
- Rep. Dave Abbott (R) of Rome City
- Rep. Steve Bartels (R) of Eckerty
- Rep. Becky Cash (R) of Zionsville
- Rep. Ed Clere (R) of New Albany
- Rep. Craig Haggard (R) of Mooresville
- Rep. Jim Lucas (R) of Seymour
- Rep. Ethan Manning (R) of Logansport
- Rep. Chris May (R) of Bedford
- Rep. Zach Payne (R) of Charlestown
- Rep. Jim Pressel (R) of Rolling Prairie
- Rep. Lorissa Sweet (R) of Wabash
The vote of Rep. Manning, chair of the House Committee on Public Policy, was perhaps the most interesting among the GOP dissenters, particularly after his predecessor as chair of the panel, Rep. Smaltz, spoke up for the measure both in the Committee on Rules and on the House floor.
The votes of Rep. Manning and Cash were the first two GOP votes against the bill. Some Republicans who voted against it, such as Rep. Abbott, waited until the very end to cast their tallies, as did a pair of GOP freshmen who ended up voting for it., Reps. Jennifer Meltzer (R) of Shelbyville and Alex Zimmerman (R) of North Vernon – both attorneys. Rep. Meltzer’s district includes a casino; Rep. Zimmerman’s district is adjacent to three such properties.
The sole Democrat to vote for the conference report, Rep. Miller of Fort Wayne, waited until about midway through the vote to pull his lever in favor of it.
Oddly, the conference committee report was adopted a few minutes later (8:42 p.m.) in the Senate 45-2, with no theatrics. Voting against the CCR were two Democrats, Sens. Shelli Yoder (D) of Bloomington and Lonnie Randolph (D) of East Chicago.