Our exclusive chats with guv nominees show expansion openness
Editor’s Note: This story was originally published in the November 1, 2024 edition of Indiana Gaming Insight prior to the election.
After several years of Governor Eric Holcomb (R) not rocking the boat on gaming expansion issues (in large part recognizing the informal moratorium on gaming issues imposed by the legislative leaders), we think you’ll see a change in attitude regardless of which major party candidate for governor is elected next week.
Last month, you will remember, Democratic gubernatorial nominee Jennifer McCormick (D) told your favorite gaming newsletter, “I do support those efforts,” referencing “a lot of potential there for revenue” . . . even as legislative leaders have been reluctant to allow policy to chase revenue and requiring public policy changes to stand on their own merits before revenue issues are considered. “I do support the expansion,” she continued, adding “I do appreciate the revenue that it brings into Indiana, and I just think there’s a whole lot there that we could take advantage of at a time where I get this question a lot, how are you going to afford that? …. How are we going to afford to do some of the things we’re going to do without just skyrocketing our taxes? And so I do believe looking at some of those options is a smart way to go.”
On Wednesday, just six days before the election, the Republican gubernatorial nominee, U.S. Sen. Mike Braun (R), also sat down with us to talk about gaming issues, and his position was similar. Sen. Braun is from Jasper, and watched the Patoka Lake riverboat license authorized under the 1993 organic law (but, as expected, never issued) moved two decades later to French Lick. A graduate of Wabash College who earned an MBA from the Harvard Business School, he served in the Indiana House from 2014 – 17, and was a member of the House Committee on Ways and Means where he had a front-row seat to budget making.
Sen. Braun had recently explained to Dustin Grove of WTHR-TV in Indianapolis that his support for considering legalization of medical cannabis use was based in part to the fact that all of our adjoining states had legalized it and some had also legalized recreational use as well – and Indiana was losing money to those states as a result. We reminded him that he had analogized the situation to Indiana’s legalization of casinos when Illinois was monopolizing Indiana patrons and other Midwestern states were also legalizing casinos. Today, given that all of our neighbors allow online lottery sales and one permits online casino gaming, where does he stand on expanding gambling?
Here’s Sen. Braun’s response:
Good question. And I think my point then was that it took us a long time to get comfortable with it. Had the system contrived to where you had to be on water, even to the extent where you built a moat around a casino in French Lick.
So we’re now, I think, one of the top states in gambling revenue per capita. But that changes too over time. And once you’re in a marketplace, you got to make sure you’re adapting to what is now most current or popular.
So I think it’s become a feature since again, surrounding states are involved in it to [the] extent that you want to be there, you miss out revenue folks travel across state lines to take advantage of it. So I did think it was a good analog(y) to the whole discussion of cannabis.
So when it comes to those two particulars, I would want to make sure that we study it well to see how it would impact the investment we have made, others have made, in gambling to date. And there’s always a point where there’s a happy medium. If you’re getting diminishing returns, because now there’s been competition that has addressed certain places on what we’re currently involved with, and you’re not adapting to where maybe younger markets or markets are changing, then that’s a telltale sign of something not being as effective.
So, I’ll look at that broadly. I’ll let the folks that will be protagonists of that make the case, and I’m sure there’ll be some antagonists. And I’ve had to kind of wade through that for 37 years and building a business entrepreneurially on different subject matter – and, of course, been doing that for six years in the U.S. Senate. So I’m looking forward to the conversation, and feel kind of well-positioned in terms of how to navigate through it.
So both gubernatorial candidates express an openness to expansion, and seem to have no philosophical concerns about bringing the Hoosier Lottery and casinos into the living room couch of every Hoosier, using the vernacular once employed by a former chair of the House Committee on Public Policy while opposing mobile sport wagering back in 2019. That battle was lost, and the camel’s nose appears poised to lift the tent about as high as might be imagined, regardless of who is elected governor. Legislative leaders – and the Senate in particular – may be the last line of defense against any new expansion.
Just as Dr. McCormick expressed to us last month when we sat down with her, Sen. Braun also is receptive to a transfer of the Ohio County license to New Haven if Ohio County and Rising Sun officials feel that they’re being adequately compensated for the loss of their casino. He used much of the same rationale for overall expansion in expressing his openness to a license move: competition, modernization, and changing times.
Sen. Braun tells us how he perceives the request to move the license. “I think it’s being considered number one, because it’s maybe not producing the results (in Rising Sun) that everyone had hoped, and again, things change. I think there’s a lot of competition in that general area. So, if they’re mutually agreeing to it, I wouldn’t see any reason why you wouldn’t want to accommodate it. So of course, there will be 150 legislators that will have an opinion, but just from what I’ve seen, the reasons behind it – it could be a win-win.”
He did add, however, that “I think you’ve got to be careful because there’s some – there’s a partnership that’s occurred with the current community, and it’s improved it. And if you can work out something where it’s not pulling the rug out from underneath them, and it can still survive and prosper in a new location, that, to me, would be a win-win.”
So as we look toward the 2025 session, should the leadership moratorium on gaming bills be lifted, Indiana’s next governor – Democrat or Republican – appears to be willing to move the state to the next level on gaming – for both casinos and the Hoosier Lottery.
What is fascinating to those who have watched the industry germinate from an idea planted in 1989 about a single land-based casino in Gary to where we are today is the evolution. In short, we’ve progressed from governors who viewed gaming as an industry to be closely regulated and not treated like every other business (Bayh) to those who have been willing to allow a small expansion to help another struggling community (O’Bannon and French Lick); one who viewed it as a hot potato best reserved to his successor to deal with (Kernan and Trump in French Lick); another who felt it should be treated as other businesses and recognized the symbiotic nature of its relationship with the state (Daniels); to one who was morally opposed to gambling but willing to allow it to proceed without expansion on his watch (Pence) to another who saw the importance of continuing the relationships forged between communities and their casinos and adapting to new economic realities and social mores (Holcomb).
Will this openness extend to e-tabs for the state’s veteran service organizations? Probably, but that is more likely to be a legislative battle.
And, of course, the details of any online expansion – operators; license fees and tax rates; game rules and limits; oversight, and the like – will also be reserved to lawmakers . . . as will the specifics of any potential license transfer (referenda, other sites, hold harmless provisions, local development agreements, open competition, revenue-sharing, and more).
We’ve appreciated the trust you’ve placed in us to chronicle this litany for you in these pages since 1993 (!) and before that, in our Hannah News Service sister newsletter INDIANA LEGISLATIVE INSIGHT, since 1989. We’ve been there since before the
beginning, and we’ll continue to offer you coverage with an unparalleled perspective . . . through what could be an interesting 2025 session for gaming.