While a gaming bill is still in play in the General Assembly, state budget forecasters are predicting the payoff to the state from legalized gambling will be even lower they thought.
The April budget forecast predicts revenues from the state’s casinos and racinos will drop by $71.5 million more over the next two years than what those forecasters predicted just four months ago. The quicker-than-expected plunge in gaming revenues is critical as the General Assembly crafts its final biennial budget and debates a watered-down gaming bill that was supposed to buffer the state’s casinos from growing competition.
And it may be worse than it looks, according to one of the chief budget makers who thinks the latest forecast low-balls the coming losses.
“I thought they should have shown a bigger drop,” said Senate Appropriations Chairman Luke Kenley, a Republican from Noblesville. “I don’t think they show the true impact of what’s going to happen. (Gaming) has been a big revenue producer for Indiana, but I don’t think it’s going to continue to be.”
Since the first riverboat casino opened in Indiana in 1995, the state’s gaming industry has poured more than $10 billion in taxes into the state’s coffers, becoming the third largest source of revenue for the state’s general fund. But with rising competition for gaming dollars in neighboring states — including four new casinos in Ohio — the pool is growing smaller.
While the two racinos (horse track-based casinos) have been holding their own, admissions and revenue at the state’s riverboat and land-based casinos are down over the last three years.
The state’s budget forecasters have been preparing for the loss. In their December 2012 forecast prepared for the budget makers in the General Assembly, they estimated overall gaming revenues would drop from about $567 million in fiscal year 2013 to just over $520 million by the ‘15 fiscal year. Four months later, in the April forecast used in the final budget bill negotiations, estimates are more grim: they’re now predicting a drop to $492 million by 2015. That includes a drop in racino tax revenues, from $117 million in 2012 to just over $95 million by ‘15.