Indiana Looking at iGaming Legislation

Given the success of sports betting in the state of Indiana, there has been a push for state legislators to put forth a bill that would legalize online casino gambling. Two years after the state adopted sports betting legislation, the door now seems to be open for the move forward. In what State Sen. Jon Ford (R-Terre Haute) called a "natural progression" for the gaming industry in Indiana, he presented a new iGaming bill on the floor this past week.

In an interview this past week with Casino.org, Ford stated: "The language in this bill is very, very similar to sports wagering, and many of the back office mechanisms in place for consumer protection, we already have in place for sports wagering. So, really, a lot of the infrastructure’s already there."

Under the provisions of the bill put forth by Ford, each land-based casino would be permitted to partner up with up to three "skins" or iGaming providers. That's the same number of skins casinos can partner with as online bookmakers.

Also, the tax rate used for iGaming providers would be significantly higher. Currently, the state's bookmakers are charged a 9.5 percent tax on sportsbook adjusted gross revenues (AGR). For online casinos, the number would jump all the way up to 18% with 15% going to the state and the remaining 3% going to the local jurisdictions where the land-based casinos reside.

As a point of reference, the state's brick-and-mortar casinos are taxed on a graduated basis. The first $25 AGR is taxed at a rate of 15%, going up to a maximum of 40% on an AGR of $600 million or higher.

Passage of the bill would allow Indiana to join the ranks of other states that have legalized both sports betting and iGaming legislation. Some of the other states include Delaware, New Jersey, Pennsylvania, and West Virginia with Michigan waiting in the wings.

Cannalbalizing Land Based Casinos?

One of the reasons for the delay in getting iGaming legislation to the Indiana state floor was concerns over cannibalization of business away from the state's established brick-and-mortar casinos. According to Ford, he doesn't believe that's going to be a problem.

He stated in the interview: “I thought going in with sports wagering that there was a consumer we were not attracting to the gaming industry here in Indiana. And I think it’s been proven with sports wagering that there was a niche that we weren’t tapping into. I think that iGaming would appeal to that group.”

When he made the statement, he was leaning on evidence from a 2017 Caesars Interactive study that indicated 80% of New Jersey's online casino customer base was derived from new gambling customers.

The iGaming market is sure to get a boost from the state's sports betting market, which continues to grow on an upward trajectory. In December, the Indiana sports betting handle came in at a robust $313.1 million, the sixth straight monthly record. That followed a very solid month in November when Indiana sports bettors pushed more than $251.4 million through the betting windows.