INDIANAPOLIS (AP) - The power of Indiana’s multibillion-dollar gambling
industry is being tested anew within the halls of the Statehouse this year
as the once-dominant industry faces new competition from neighboring states
and declining collections amid a stubborn economy.
Indiana’s 11 casinos and two racetracks with slot machines are seeking new
concessions from the General Assembly in what they say is a do-or-die
situation. Just how much they have spent this year pushing that message will
not be available for months to come, but lobbying records compiled by The
Associated Press show they have not hesitated to spend big at the
The gambling industry spent more than $19 million lobbying at the Statehouse
from 2000-2012, according to reports filed online by the Indiana Lobby
Registration Commission. The greatest spending came during wagering tax
battles in the 2008 and 2009 sessions, when the industry spent $5 million
combined. The commission only posts reports dating from 2000 in its online
In that time, those millions bought Indiana’s riverboats the right to dock
permanently, an exception to the state’s water rule for the construction of
the French Lick Casino and Resort and the installation of 4,000 slot
machines at Indiana’s two horse-racing tracks.
But gambling has largely been the product of Indiana’s Democrats, growing
most under Democratic governors and Democratic majorities in the House of
Representatives. The shift to Republican dominance in the last few years has
produced new leaders skeptical of any expansion of gambling.
New Gov. Mike Pence said recently that he opposes any expansion but would
consider cutting taxes for casinos.
“I don’t gamble on anything, except politics,” he said, half-jokingly.
Gambling money is the state’s fourth-largest source of tax revenue. Only the
state’s sales tax and personal and corporate income taxes bring in more. But
the decline of the industry has lessened how much gambling money lines the
state’s coffers. The industry paid $614 million in state taxes last year but
is expected to kick in only $520 million by 2015.
Pence’s defense of the status quo may seem like a defeat for the gambling
lobby, but even supporting existing gambling marks a victory for the
casinos, said Ed Feigenbaum, editor of Indiana Gaming Insight and a veteran
“If you look at the last couple of years, the Republican resistance on
philosophical grounds has largely evaporated, and Governor Pence is a great
example of this. Gaming is the accepted public policy of the state. It is a
legitimate industry,” he said.
A quarter century ago, gambling was banned in Indiana. But voters repealed
that ban in 1988, and Indiana quickly rocketed to become the state with the
third-largest gambling industry, trailing only New Jersey and Nevada.
“If you had told anybody 25 years ago that a casino company would be a
sought-after client for a major law firm in this town, you would have been
laughed at,” Feigenbaum said. “Now they’re a major source of revenue for all
the big law firms.”
The $19 million to lobby for the industry has been spent on everyone from
the partners of Indiana’s largest law firms to big names like Donald Trump.
Average rates for most lobby shops run from about $40,000 to monitor
legislation during one session to about $120,000 to push measures through
the General Assembly.
But gambling interests routinely exceed those standards. The owners of
Hoosier Park spent $524,000 lobbying during the 2009 session and roughly
$1.2 million in 2008 during an unsuccessful effort to save $33 million on
state taxes. Lobbyists for Centaur Inc. argued at the time that the state
had gouged them by offering slot machine licenses for $250 million.
The price of the licenses, and the interest paid to finance them, forced
both tracks into bankruptcy.
“I’m not sure the gaming industry has ever been able to get what it wants,”
said John Keeler, vice president and general counsel of Centaur Holdings,
which owns both Hoosier Park and Indianapolis Downs as of last month.
The money spent on lobbying may seem like it gives his company and the
casinos a bullhorn in the Statehouse, but that’s only because gambling
interests can’t make campaign donations. Powerhouses like the Indiana
Manufacturers Association or the Indiana State Teachers Association can
spend on lobbying during the session and during the campaign season to get
supporters elected, but casino owners have to funnel all their money into
“Whenever you are in a highly regulated industry, created and sanctioned by
the government, your fortunes are at the peril of the Legislature,” Keeler
Centaur has spent the most of any operation in the last 12 years, pumping
$6.5 million into the Statehouse.
Rep. Patrick Bauer, D-South Bend, said the casinos and racetracks might
appear as one conglomerate industry, but they often quarrel among themselves
as they compete for gamblers.
The former speaker, who shepherded much of the state’s gambling legislation,
said the industry should be careful not to ask for too much, like it did in
2009 when it lost an effort to reduce its taxes.
“I think there’s a very big concern that everybody is just loading it up and
they’ll just blow it up again,” Bauer said.
The latest test will be a Senate bill that would legalize full-blown casinos
on land, allow the race tracks to install table games and allow casinos to
withhold some of the aid they pay to the counties where they’re located.
“They must have some power, because they’re getting a tax bailout and the
average Hoosier is not,” said Micah Clark, executive director of the
American Family Association of Indiana, referring to stalled efforts to
approve Pence’s 10 percent proposed income tax cut.
It won’t be clear until the end of the year how much the industry spent at
the Statehouse this year trying to win an expansion. But if previous
battleground sessions are any indication, 2013 could be another pricey wager
for the industry.