HB 1038, with hope for 4 counties, in Senate; changes expected
Legislation offering a process by which to transfer the existing casino license from Rising Sun in Ohio to Allen County, DeKalb County, Stueben County, or Wayne County via a competitive process involving Indiana’s incumbent casino license holders was the last measure to pass through its chamber of origin during the first half of session.
Monday’s 67-30 vote came after only one member spoke on the bill, House Democratic Leader Phil GiaQuinta (D) of Fort Wayne, who praised the shaping and composition of the package, taking less time to do so than the author, Rep. Craig Snow (R) of Warsaw, took in meticulously explaining the mechanics of the measure to the chamber (and part of Rep. GiaQuinta’s soliloquy was in praise of Rep. Snow’s temperament and work in advocating the measure).
No members rose Monday to question why Indianapolis had been left out of HB 1038’s growing list of potential sites for a relocated cassino, nor was there any attempt to call Second Reading amendments (which had been filed) in the House to add the State’s largest city to the options, despite the Spectrum Gaming Group study for the Indiana Gaming Commission showing such a casino to be the most lucrative for the state in both gross revenues and the net take as well, even after considering market cannibalization.
As work in the Senate wrapped up late in the previous week, Senate President Pro Tem Rodric Bray (R) of Martinsville struck an optimistic note for the license transfer bill. “ Senator Busch is going to, I think, have that that bill, and I expect that something’s going to get passed. I can’t tell you exactly what the language is, but we continue to talk about it. There continues to be support, I think, building for the idea of some option to move a casino up into Northeast Indiana. The study obviously shows that it would be profitable up there. So, I look optimistically at the movement of that bill.”
But we would caution you to temper some of the optimism. A close look at the House vote on the measure finds that all four House Republicans who represent Allen County voted against the measure (both Democrats favored it).
Rep. Chris Judy (R) of Fort Wayne told WANE-TV in Fort Wayne that he voted against HB 1038 after considering results from his 2026 legislative survey, which found 54% of constituents opposed to a casino resort in Fort Wayne, 34% in favor, and 12% undecided.
While Sen. Justin Busch (R) of Fort Wayne will be the Senate sponsor, the other three members of the Allen County delegation – Sens. Liz Brown (R) of Fort Wayne, Tyler Johnson (R) of Leo, and Travis Holdman (R) of Markle – are all fervent gambling opponents. Johnson also shared DeKalb County representation with Sen. Sue Glick (R), who also represents all of Steuben County. Sen. Glick is perhaps the only senator from that corner of the state who is likely to be supportive . . . and there is still a vacancy in the seat of pro-gaming former Sen. Andy Zay (R) of Huntington.
As for senators from the East Central area . . . Sen. Jean Leising (R) has been pro-gaming, but will first look out for her nearby Horseshoe Indianapolis and the ag-equine community. Sen. Scott Alexander (R) of Muncie is not a gaming advocate and will also likely look to protect the nearby Hoosier Park Racing & Casino and the ag-quine industry that thrives in rural Delaware and Randolph County. Sen. Jeff Raatz (R) of Richmond is not a gaming advocate, but locals are counting on him to back a hometown casino option.
In case you haven’t been reading our Hannah News Service sister newsletter, INDIANA LEGISLATIVE INSIGHT, you need to know that a passel of incumbent Republican senators are being challenged from the right in their respective May primary elections as a result of their votes against new mid-decade congressional maps. This is an effort directed by the White House political team that involves several presidential and MAGA-affiliated consultants, political groups, and committees, and has the potential to change the composition of the caucus and point it in an even more socially conservative (read: anti-gaming) direction – one in which additional revenue for the state is not justification for assisting the gaming industry. Team Trump has also targeted anti-redistricting senators – including Senate leader Bray – who are not up for reelection until 2028 (when several veteran senators – from both parties) are expected to retire regardless of any national push to oust them.
You could also see the Republicans pick up an open (Indianapolis-Carmel-Zionsville) seat in November currently held by Democrats –an anti-gaming former Republican senator is running in the primary, and while Democrats have high hopes of picking up an open GOP seat in northeast Indianapolis, Lawrence, and Fishers, chances are better of the GOP flipping the other seat.
Your bottom line: the Senate that returns in 2027 and then in 2029 is far less likely to be amendable to “expansion” of gaming or accommodations for the gaming industry, so 2026 may be the last time the iron is hot for a license transfer. Ditto (in spades) for online gaming, but that’s another story.
Seven House Democrats from Indianapolis voted against HB 1038 while four House Ds from Marion County approved it. Republicans from Marion County also split on the legislation. In the Senate, it will be tough to get support for a transfer that leaves out Indianapolis from perhaps more than two senators whose districts include territory in Marion County.
On a broader basis, note as well that the measure only cleared the House Committee on Ways and Means on recommittal by a 10-8 vote (no Democrat voted for it because Indianapolis was being left out of the process, and three Republicans also voted against the bill).
Beyond just rounding up the votes of those who would ordinarily be assumed to favor an economic development initiative and new jobs for their respective communities, however, is the realization that HB 1038 remains a work in progress.
As it cleared the House and moved across the Rotunda, HB 1038 would authorize – but not mandate – a county referendum on hosting a casino in the four counties, and the Indiana Gaming Commission would take into account any such votes as it looks to select a new casino operator and site by April 15, 2027. Applications for the transferred license would be required to carry the support of the host city mayor and board of county commissioners.
The applicant pool would be limited to the nine current operators; none would violate the statutory ownership cap by winning the new license, but the Gameboys could well be concerned about undue market concentration by awarding a third or fourth license to the trio of current operators who hold multiple licenses (think back to the local divestment debate by commissioners when Eldorado Resorts, Inc. acquired Caesars Entertainment Corporation in 2020-21). That could be problematic, as we’ve been hearing that at least two owners have quietly been looking at selling their respective properties, and not interested in adding. Beyond that, others may not be eager to invest another $550 million+ in the same Indiana basket, as well as potentially being forced by the Gameboys to divest a current property at a fire sale price should the additive nature of a new license raise market concentration concerns wither from Indiana regulators or from the Federal Trade Commission.
The details of the competitive process would largely be at IGC’s discretion, and the ultimately successful bidder would pay a $50 million transfer fee to the State over a five-year period. Look for both of those numbers to be (ramped) up for negotiation in the Senate – and the bottom line is only likely to rise, despite the economics. If Full House Resorts, Inc., the parent company of Rising Star Casino Resort doesn’t obtain the transferred license, the successful applicant would be required to compensate Full House for the fair market value of the Rising Sun property as determined by an independent consultant retained by the gaming commission.
The successful bidder for the transferred license would also be required to pay a total of $30 million (a typo we didn’t catch in our last issue had said $320 million; sorry!) to the City of Rising Sun and Ohio County to help them recoup foregone casino tax revenue. This number, below what Full House had proposed last year when it sought to move the license to New Haven, as well as its duration, will also likely see a change in the Senate . . . along with discussion of details regarding how local redevelopment opportunities will be pursued in the state’s smallest county, where the casino is both the largest single private employer and property tax payer.
The new operator is also mandated to invest at least $500 million in the new facility (and campus) within five years of opening, also a number we expect to be the subject of debate, given the current economy and inflation-adjusted (initial) investments in the 13 properties already operating. In particular, it would be difficult to convince anyone to invest $550 million+ in any facility in Wayne County . . . but we don’t think that lowering the ECI investment will convince a current operator to bid here, so the marketplace will likely rule out Wayne County and likely DeKalb County as well.
Whie there are questions about the philosophical proclivities of senators and how protective pro-gaming solons may be of the ag-equine industry or their local casinos, relationships may not be quite as hunk-dory in each community as earlier portrayed, for example in testimony before the Senate Committee on Public Policy on SB 70, which failed to advance after being approved in the substantive review committee.
For example, Allen County and Fort Wayne appear to be at odds over the division of revenue, and the Summit City’s mayor, reportedly concerned about being so out front on the issue before her first opportunity to face voters next year as the incumbent mayor, failed to send a city representative to the last legislative hearing. Meanwhile local activists, including grassroots organizer Cathie Humbarger, the influential retired Allen County Right to Life leader, are quietly hitting their marks. As well, Steuben County leaders seem to be edging a bit further away from Allen County proposals now, after getting their nose in under the tent legislatively (rather than having to work with Allen County and make a case for revenue sharing).
Allen County Commissioner Ron Turpin (R) also joined Kayla Blakeslee on WOWO 1190-AM Fort Wayne’s Morning News to break down the legal and zoning realities of the casino proposal on January 27. “ ‘The short answer is no,’ Turpin said when asked if a casino could currently be built within city limits or anywhere in the county. ‘There are zoning laws set in the beginning of the segment. The city of Fort Wayne has them, Allen County has them.’ He explained that Fort Wayne specifically prohibits large-scale gaming under its current zoning rules, meaning the city’s development commission would need to approve any changes for a casino to be considered. Similarly, much of Allen County is zoned agricultural, so any proposed casino would require a zoning change to move forward …. ‘there’s a lot of hurdles in place before any kind of gaming facility would ever come to Allen County – and that’s just one of them,’ Turpin said.”
Even so, Fort Wayne Mayor Sharon Tucker (D) tells the Rotary Club of Fort Wayne on Monday that she feels a new casino location in the area is inevitable. “The northeast area has become one of the prime places to go because we are an untapped market right now when it comes to gaming,” she told Rotarians. “Naturally the state and all those who are interested will look at places where they can make the most revenue .… So, the language has changed from ‘if’ more to ‘when’ gaming will be here.” Mayor Tucker notes that there has been a major change in attitude as well. “Eight or nine months ago, no community would have ever used the curse word ‘casino,’ ” she observed. “Last Thursday when they were taking a vote, there were at least three communities that were down at the State House fighting to get the casino in their community.”
Referring to the rumored prospect of a Native American casino in Fort Wayne, the mayor looks to seize the initiative. “I believe it should be gaming the City of Fort Wayne and the State of Indiana receive the proceeds from. We should not have gaming in our community that we don’t get to control,:” she adds. “If gaming is coming, it should benefit our city so that we don’t just see the negative impacts.”
Meanwhile, Steuben County and Wayne County have come to the table a bit more united, with Rep. Tony Isa (R) of Angola telling the Angola Herald Republican, “Steuben County would make an ideal place to expand economic opportunity for the region and the state.” He reiterates that “A casino here would strengthen tourism, support local businesses and provide new revenue to invest back into our communities.” Steuben County officials have made three trips to the State House in the first five weeks of the year to advocate for a casino in the county that borders both Michigan and Ohio and is traversed by I-69 and the Indiana Toll Road.
Be sure not to ignore the Ohio County imperative, either. As proposed, HB 1038 offers a vastly reduced incentive for Rising Sun and Ohio County compared to the original proposal negotiated outside the legislative context between Full House and the local government headed into the 2025 session.
We know what we wrote recently about newer members of the General Assembly representing a n increasing share of the casino companies, and how that could negatively impact casinos seeking to improve their lot. Rising Sun is represented by freshman Rep. Garrett Bascom (R) of Lawrenceburg and Sen. Randy Maxwell (R) of Guilford, in rural Dearborn County (the letter of whom will face the voters for the first time in May’s primary). Despite the seniority deficit, we’re hearing that Rep. Bascom “has the juice” to kill the bill with Sen. Maxwell should they determine that Rising Sun and Ohio County are not being appropriately compensated for the loss of their casino.
At the same time, there is also talk that some may also seek to devise a DUAB-like framework under which a new state entity would be established, much like the Distressed Unit Appeal Board works for public school corporations in financial straits, to oversee the Ohio County casino under certain conditions (separate from the current trustee-in-waiting process). Such a deal would sideline Full House, but it would still need to be compensated; management is not the problem at the state’s smallest property operating with the state’s smallest casino vessel, a pre-first generation boat, in a location sandwiched by two much larger casinos in adjacent counties. We’re not sure what a DUAB-like structure would do save disadvantage Full House, but the talk is floating around out there.
All of this follows a relatively drama-free pre-Second Reading hearing on recommitment in the House Committee on Ways and Means.
In Ways and Means, Rep. Snow offered an amendment to his own bill that would modify the distribution of tax revenue collected from a relocated casino in Allen County, DeKalb County, Steuben County, or Wayne County to require 10% of local casino tax revenue to be diverted to a regional development authority, rather than being retained by the host city or county. The remaining 90% would be split 45% to the city in which the casino conducts gaming operations and 45% to the county in which the casino conducts gaming operations. Before the RDA amendment, the bill originally called for the distribution of 50% to the city and 50% to the county.
Backers of the change liken the RDA distribution to revenue sharing, believing that it would ensure surrounding communities share in the economic impact of a casino, and allow a share of the revenues to be used for broader regional development projects instead of being limited to strictly local priorities. Those who oppose the shift in revenues contend that it dilutes the local benefits, and adds a new layer of governance.
This provision is also likely to be closely reviewed in the Senate . . . and could only have been offered by someone who was not from one of the potential host venues.
On the floor, Rep. Ben Smaltz (R) of Auburn offered what he said was an amendment “very important to my district” and adjacent counties that was drafted with “great care and great tact” to work for everyone involved. His amendment “creates a referendum process” on a permissive (“may”) rather than mandatory basis, that may also be considered by the commission in a license award deliberation. He said it affords greater local flexibility. Rep. Snow endorsed the amendment offered by the former House public policy committee chair, labeling it a “creative way to approach the referendum process, and I’d ask for your support of it.” After backing from Rep. Kyle Miller (D) of Fort Wayne, the amendment was adopted without dissent.
A pair of “statement” amendments proposed by Rep. Greg Porter (D) of Indianapolis (one to direct $50 million of state casino revenue for pre-K purposes “instead of going back to build the surplus”; another related to child care development fund vouchers for Ohio County) were defeated largely along party lines.
On Third Reading Monday, Rep. Snow largely explained the purpose of his bill as “aiming to modernize license placement and foster competition among operators and community while protecting local government and preserving gaming continuity.”
The measure passed with about as minimal amount of debate as we can ever recall a gaming bill doing on Third Reading.
Senate sponsors are Sen. Justin Busch of Fort Wayne; Senate Committee on Appropriations Chair Ryan Mishler (R) of Mishawaka; and Senate Majority Floor Leader Chris Garten (R) of Charlestown. Sen. Maxwell is a cosponsor.
The measure has been referred to the Senate Committee on Public Policy, where Chair Ron Alting (R) of Lafayette on Wednesday slated a hearing on the bill for Wednesday, February 11 at 1:00 p.m.
In case you’re wondering why Sen. Alting is not sponsoring the measure, given his proclivity to have his formal imprimatur on key gaming bills before his panel, we presume that he learned a lesson from the demise last year of the license transfer bill authored by then-Sen. Andy Zay (R) of Huntington – in no small part because it was carried by a senator not from the affected area.