Legislation to launch regulated online casino gaming and poker in Indiana in 2023 is officially dead.
For the third year in a row, lawmakers have introduced a bill in the Indiana General Assembly to expand iGaming beyond sports betting, which launched in September 2019. And for the third year in a row, the same House committee has proven to be an insurmountable obstacle to such an expansion.
Supporters will now have to wait until next year to try again.
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iGaming Bill Had Promising Start
At first blush, the failure of HB 1536 is a bit of a shock.
The Hoosier State was on several analysts’ short list as being the next state to expand into the world of regulated online casinos in the USA, after initially offering just sports betting. In many cases, expanded iGaming in Indiana was considered the most likely gaming expansion scenario for 2023.
A supportive report by Spectrum Gaming Group release last fall, in which the firm said online casinos wouldn’t cannibalize revenue for land-based properties, also appeared to give HB 1536 some tailwind. The report was commissioned by the state regulator, the Indiana Gaming Commission (IGC).
With what seemed like promising odds at the time, Rep. Ethan Manning (R-Logansport) introduced HB 1536 on January 12, the last day to do so in the House. His bill was promptly referred to the House Committee on Public Policy, a panel that Manning chairs.
HB 1536 would have allowed each of the state’s 13 land-based casinos and racinos to run three online casino skins. It also would have allowed Indiana to join a multi-state gaming compact for online poker. The bill called for taxing online casino gaming at 20%.
Analysis May Have Upended Bill’s Chances
But the bill appeared to run into trouble almost immediately.
The House Committee on Public Policy met three times during the 2023 legislative session — on January 24, January 31, and February 14 — to discuss other bills, but not Manning’s.
Then a controversial analysis by the Office of Fiscal and Management Analysis (OFMA) opined that the state’s 13 land-based casinos and racinos would lose between $134 million and $268 million in annual revenue if online casinos were legalized — disagreeing with Spectrum’s findings from last fall.
“Online casino games will displace some gambling activities occurring at brick-and-mortar casinos,” OFMA said in its analysis, which was attached to HB 1536 as part of the legislative process.
“Studies have concluded that up to 30% of new online gaming revenues are displaced from existing casino revenues. This figure could be higher for a saturated market like Indiana.”
OFMA’s findings also don’t comport with the fact that online casino gaming has successfully launched in four states with land-based casino gaming beforehand — Connecticut, Michigan, New Jersey, and Pennsylvania. Land-based and online gaming coexist in all four states and together have been assembling ever more impressive revenue figures.
Opposition to online gaming because it harms land-based gaming is also in contravention of the facts — online gaming creates additional opportunities for operators to engage with and retain their customers.
Deadline for Committee Hearing Passes
HB 1536 was already facing long odds at passage because Indiana is a socially conservative state. The analysis by OFMA may have sunk it.
That’s because OFMA may have provided cover for eight Republicans on the panel to deny Manning’s bill a hearing. But instead of voicing their opposition to the bill because it calls for expanding iGaming, the GOP panelist could do the same under the guise that online casino gaming would negatively impact the state’s land-based casinos.
Without GOP support, iGaming legislation is DIA in Indiana. The party holds supermajorities in both chambers of the Indiana General Assembly.
House rules required the committee schedule a hearing on HB 1536 by February 21. After failing to do so, the bill is effectively dead for the 2023 session. The bill also needed to be read in the House three times and faced a February 27 deadline to win passage in the chamber in order to advance to the state Senate.
Manning did not return a message seeking comment Thursday. The lawmakers actually had another gaming bill that failed to get a hearing by the same panel. HB 1073 called for allowing the speaker of the House and the president pro tempore of the Senate to each appoint one member to the IGC, among other things.
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Five previous attempts to expand iGaming failed across 2021 and 2022. The House Committee on Public Policy derailed four of those attempts.
In 2021, Rep. Alan Morrison (R-Brazil) introduced a bill to legalize online casino gaming but it was referred to the committee and died there. Similar bills submitted by Manning and Rep. Doug Gutwein met the same fate during the 2022 legislative session.
Sens. Jon Ford (R-Terre Haute), Chris Garten (R-Charlestown), and Ronald Grooms (R-Jeffersonville) also introduced an iGaming expansion bill during the 2021 session. It was subsequently referred to the Senate Committee on Rules and Legislative Procedure but went no further.
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