As 30th casino gaming anniversary looms, time for assessment?
For those who were present at the creation, it may be a bit jarring to realize that December 8 will mark 30 years of legalized riverboat gambling in the State of Indiana. Those much younger will simply think of gambling as a longstanding public policy that, for them, has always been part of the fabric of the state.
The Hoosier Lottery sold its first ticket on October 13, 1989, Hoosier Park opened for pari-mutuel horse racing on September 1, 1994, and Indiana Downs debuted on December 6, 2002, almost three years before Casino Aztar Evansville pushed off for its first official gambling cruise on the Ohio River.
The gambling environment was far different Back in the Day, as Indiana’s riverboats – positioned along the state’s borders with Illinois, Kentucky, Michigan, and Ohio, were intended to capture dollars from out-of-state residents as well as keeping Hoosiers at home to gamble instead of losing tax revenue to Illinois, and getting a jump on Kentucky, Michigan, and Ohio.
This strategy largely worked, as did the original oligopical structure which saw companies competing for a limited number of inexpensive licenses that would effectively guarantee success and promoted significant capital investments. In the early days, Illinois effectively failed to respond to the Indiana expansion, Michigan and Ohio were slow to board the gaming gravy train, and Kentucky was largely content to stick to its knitting and continue to promote pari-mutuel horse racing. Illegal gambling, in the form of video gaming terminals in bars, taverns, fraternal and veterans organizations, convenience stores and laundromats, and even in permanent and pop-up trailers proliferated. So too did pea-shake in inner cities (particularly Indianapolis), and you could even place illegal sports bets at scores of locations, including one just a few feet east of the State House.
Over the decades, however, the gaming milieu changed. As riverboat operators proved their worth to host communities and the state, the stigma attached to gambling quickly evaporated, and “the boats “ were allowed to remain at the dock and open boarding was authorized, eliminating the
“must cruise” façade and making Hoosier properties more convenient, competitive, and lucrative. French Lick was allowed to open a casino after a lengthy grassroots lobbying effort by the “the Orange Shirts.” We allowed the two horse racing venues to add “slots at the tracks,” and concurrently cracked down on illegal machines while allowing certain limited paper gambling at bars, taverns, and fraternal and veterans organizations.
Eventually, lawmakers determined that they no longer needed to live by the precept that “The Mafia can’t swim,” and allowed casino to expand upon their original footprint, and then even allowed inland casinos off the footprint as live table games were authorized for the two racinos near Indianapolis. The twin Gary casinos consolidated and moved inland to a highly visible interstate location, and a new license was granted to Terre Haute. A Native American casino opened in South Bend, and after it had shown itself to be a good neighbor to local government, the State finally cut a mutually rewarding deal with that property as well.
Indiana also opened the state to sports wagering as well, helping current casino licensees prosper by allowing them to sell the rights to sports wagering in Indiana under their respective imprimaturs, beating Illinois, Ohio, and Kentucky into the game.
In 2025, the General Assembly even expanded gaming to include e-tabs for veteran service organizations (as it also refused to allow the Hoosier Lottery to pursue online options).
Industry practices also changed, with electronic gaming devices moving from coin-operated pull machines to cashless ticket-in, ticket-out touch devices requiring far fewer slot attendants and hopper changes, trimming employment levels. We also watched Illinois move long ago to non-smoking casinos, but Indiana has been slow to respond. After Covid protocols forced a change in smoking policies, the French Lick Casino Resort converted its casino floor to a smoke-free space, and the Terre Haute Casino Resort was built last year with non-smoking casino floor (and separate indoor smoking and gaming patio). As casinos have sought to attract a younger demographic, they have introduced interactive participatory games that engage multiple players.
But while the industry within Indiana has fared well and the executive and legislative branches have played their role in ensuring a lucrative symbiotic relationship, our neighboring states have also adapted as the national landscape has changed.
Illinois, our largest out-of-state market, added new casinos and also allowed its properties to move to land. The Rivers Casino in Des Plaines, and, more recently casinos near the Indiana border in Danville, downtown Chicago, and – more importantly – East Hazel Crest, have cut into the Indiana revenue stream.
Michigan’s Native American casinos have ventured closer to the border – Four Winds Casino New Buffalo was the big game changer, opening August 2, 2007 – and the four land-based casinos that opened in Ohio in 2012 and 2013 basically sucked about one-third of the revenue from Indiana’s trio of Cincinnati-market casinos, paving the way for the Rising Star Casino Resort to be sold for about one-third of the initial investment because revenues were down to less than one-third of what they were during its heyday (including time when it was one of only two options in the region). Ohio also added racinos that further carved out revenue from Indiana, and Kentucky began to offer slot-like historical horse racing (HHR) machines at locales near our border as well.
Indiana briefly enjoyed an advantage in sports wagering as Illinois, Ohio, and Kentucky were late to the game, and brick-and-mortar sportsbooks in Lake County, Dearborn County, and Clark County, Harrison County, and even Allen County were beneficiaries of the exodus of sports bettors from those three states – until lawmakers in our neighboring states took off their blinders and largely changed their laws to comport with ours (Indiana still enjoys visits from a few stray bettors from those states who may not be able to engage in wagering on certain college teams; prop bets or prop bets on college teams; who may want to avoid paying certain tax surcharges; or who seek better odds or betting options because of our lower tax rates).
But all of this starts to show you that the gaming milieu is changing. States around us are quicker to respond to wishes of residents – or the need to cash in on new or increased revenue streams – and while regulation of the larger sources (casino, pari-mutuel, and sport wagering) remains tight, the attitude has been more laissez-faire with respect to the low-stakes “mom-and-pop gambling, including paper games and distributed gaming.
And that’s what Indiana is up against. Commercial casinos are strong in each of our neighboring states save Kentucky, but the Bluegrass State is expanding its HHR footprint – albeit with mixed success. Indiana’s Lake County casinos will soon face added pressure from a thriving Southwind property and a forthcoming permanent signature Bally’s property in the West Loop. Video gaming terminals continue to proliferate in Illinois – 49,509 were licensed to operate in 8,755 establishments there in August – and Chicago is now taking steps towards authorizing VGTs in the Windy City proper. Kentucky is expanding gaming options and enmities at its venerable Churchill Downs property in Louisville and has poured cash into HHR parlors downtown there and in Greater Northern Kentucky, were they hope to peel off some patrons who would otherwise travel to one of the three Indiana casinos in the Cincinnati area. The Native American casinos near Indiana’s northern border continue to raise their respective games and offer alternatives to Indiana.
Meanwhile, daily fantasy sports operators such as PrizePicks, legal in some states including Indiana, have pushed the envelope on what is and isn’t sports wagering, but prediction markets now threaten to even overshadow such operators. Sports prediction markets offer platforms where users trade yes/no contracts on the outcomes of sporting events that pay based on whether an event occurs, befuddling state regulators who believe them to be nothing more than illegal sports wagering. Sports wagering is regulated at the state level since the major Supreme Court of the United States ruling in 2018 finding that the Professional and Amateur Sports Protection Act (PASPA) of 1992 – which effectively outlawed sports betting – conflicted with the Tenth Amendment. Prediction markets, however, operate nationally under (minimal) federal oversight from the Commodity Futures Trading Commission. Prediction markets are now threatening to overwhelm traditional sport wagering with no state control.
Back Home, two different tribes of Miami Indians may be looking to enter the gaming world in North Central and/or Northeast Indiana. Lawmakers are also likely to consider a potential casino move or new casino based upon a legislatively mandated study of underserved markets. The state’s smallest and least lucrative casino, Rising Star Casino Resort in the state’s smallest county, is looking to move, and the prospect could set off a civil (or uncivil!) war as current casino operators seek to protect their own markets, with Caesars Entertainment, Inc. likely having the most to lose . . . and it is the state’s most prominent operator, owning three properties that generate about one-third of state casino revenue each month (more than $78.5 million in August), and operating a fourth under a management agreement that carries the Caesars brand. The empire accounts for four of the state’s top five casino properties in a typical month – all but the state-leading Hard Rock Casino Northern Indiana.
While the world around us – and within Indiana – has been changing, the State has failed to take a comprehensive look at the overall environment within the state or more broadly in terms of the context in which Indiana gaming operates since then-Gov. Frank O’Bannon (D) established the Gambling Impact Study Commission. The diverse panel met for two years and issued a lengthy report in December 1999.
We summarized for readers back then – almost 25 years ago – the study’s findings.
The bottom line: casinos and other forms of legalized gambling have been “an economic shot in the arm” to the state and host counties, but it is far too early to assess whether that shot may carry serious negative impacts.
Gaming advocates seem to be pleased with the results, yet anti-gamers point to the cautionary note and caveats behind the numbers and conclusions.
Some key recommendations include more coordination of gaming policy among the regulators; more enforcement of prohibitions against youth gambling and illegal gambling; better regulation of charitable gaming; more research; and industry codes of good practice for marketing and advertising.
One significant change from the draft involves an extension of the period for potential impact from the initial three years that had been discussed. “The initial social impacts of gambling now legal in Indiana cannot be accurately measured until approximately five years after the last riverboat casino opened.” That means we are looking at not being able to judge until late 2004 . . . or about nine years after the first boat opened in Indiana.
The Commission did not endorse an effort … to recommend that all of the entities involved in legalized gambling (horse racing, the Hoosier Lottery and Bingo and charitable gaming) contribute toward the cost of problem gambling, and not just the riverboat casinos.
Not much seem to have changed in a generation. There has been no update to this study (and governors in the past 20 years even diverted dedicated Indiana Gaming Commission Gaming Research Division funding from data collection, analysis, and evaluation to more general uses), but the findings seem to still be largely generally applicable, even as industry structure and market practices have changed and new forms of gaming and competition are proliferating.
There has been a good bit of discussion since sports wagering was legalized in Indiana that we need to reassess our approach to problem gambling, particularly among the younger demographic, but nothing has been done to jumpstart such an effort . . . nor have we taken any kind of dive into the more than occasional cases of embezzlements to support gaming habits or to become top-tier VIP patrons.
We haven’t heard anything about it, but as talk increases about expansion of the Hoosier Lottery online, a casino move or addition, new Native American gaming options, and decreased revenue due to competition across our borders and potentially nationally from prediction markets spoiling our revenue stream from sports wagering, you should not be surprised if Governor Mike Braun (R) decides to convene a new Gambling Impact Study Commission in the coming months.
The late 1990s version was chaired by then-attorney general Jeff Modisett (D), a former federal and local prosecutor whom the then-governor trusted. While it might be nice to have a statewide official chair such a panel today, we’re not sure that Gov. Braun could find a friendly enough face among the limited pool to merit entrusting a statewide elective official with such a role.
We would look for him to turn to a former elected official with the trust of both parties and sufficient gravitas manage such an important panel with public confidence. Former Indianapolis mayor Greg Ballard (R) might be such a pick; Indianapolis did not have a casino under his watch, and he is not associated with casino interests. Former House speaker Brian Bosma (R of Indianapolis has more casino public policy experience and industry understanding, and could also run such a commission. Former attorney general Steve Carter (R) is close to the Governor and took on some members of the casino industry on local development agreement – as did his successor, Greg Zoeller (R). Both could also credibly lead such an effort.
As Indiana rounds out its 35th year of legalized gambling in the form of the lottery and rapidly approaches the 30th anniversary of casino gambling, a comprehensive assessment of where we’ve been, what has worked and what hasn’t, and how the state may best approach the future of gaming in the state from a social, political, geographic, and economic perspective may be appropriate.