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The future of casino gambling is anything but a roll of the dice.

According to a report conducted for The Casino Association of Indiana, operational changes and capital investments, such as the $5 million investment Horseshoe Casino unveiled Wednesday with The Eatery, are necessary in light of the challenges the commercial casino industry is facing in Indiana and those it will face in the future. The future includes the planned opening of a new Four Winds Casino in South Bend by the Pokagon Band of Potawatomi Indians that was announced recently.

"Capital investment is key to the future of Indiana's casino industry; its importance cannot be over-emphasized'" wrote Spectrum Gaming Group, an independent research and professional services company located in Linwood, N.J., in its market assessment report, "Challenges Facing Indiana's Commercial Gaming Industry, including Planned Indian Casino in South Bend."

The report, which was released recently, found the South Bend casino, which, as a tribal casino, would not have to pay many of the same taxes as commercial casinos, could cause the state to lose more than 1,800 direct and indirect jobs, almost $73 million in state tax receipts and more than $282 million in gaming tax receipts in five years if some action by the casinos, and state, is not taken.

The Eatery, an opulent new food hall that features four dining options set amid 18,000 pounds of Italian marble and more than 22,000 gold tiles, is an example of that kind of capital investment.

Unlike the restaurants it replaces, which Horseshoe Casino's Regional President and General Manager Dan Nita said were tucked away in corners of the Hammond casino, The Eatery is located in a prime spot on the gaming floor, taking up space once occupied by slot machines.

The room is redolent with the aroma of hamburgers, fresh wraps and salads, pizzas, coffee and pastries prepared a short distance away from the gaming action.

"This fulfills a need we felt we needed to satisfy," Nita said of the $5 million investment.

Facing the future

Spectrum believes the state, too, will have to take some actions to allow the casinos to reinvest in their properties and thrive.

They include: Allowing operators and regulators to develop alternatives to the admissions tax, which Spectrum views as regressive; changing the tax policy on free play, which has become a critical part of casino marketing; allowing casino operators to deduct the tax on adjusted gross revenue as an expense that could offset taxable income; and reforming the AGR tax structure to encourage incremental revenue growth.

Nita said when casinos were first made legal in Indiana more than 20 years ago, it was done with certain assumptions about the competition the casinos would face.

"The landscape has changed dramatically since then," Nita said.

In addition to the tribal casinos in New Buffalo, Mich., and soon, South Bend, Northwest Indiana's five casinos now find themselves faced with an increased number of commercial casinos that opened in surrounding states, an onslaught of video gaming machines in Illinois, and a changing guest base with millennials more focused on table and electronic games than the slot machines their parents and grandparents favor.

Since tribal casinos don't pay many of the taxes required by commercial casinos, giving them a distinct advantage, Spectrum recommends the state seek a compact with the Pokagon tribe to ensure that its casino's revenue share with the state falls in line with the gaming tax rate paid by commercial operators in the event it seeks a Class III status, which includes table games, as predicted.

If the Pokagons operate the South Bend casino as a Class II operation, the state's best option would be to encourage capital investment in commercial properties, Spectrum stated.

Ed Feigenbaum, gaming analyst and editor of Indiana Gaming Insight, believes the Pokagon tribe will open their South Bend Four Winds as a full Class III casino.

"The Pokagons run a first-class operation in New Buffalo and they will do the same in South Bend. They will be able to offer amenities commercial casino operators can't afford because of the taxes (commercial casinos) pay," Feigenbaum said.

The price of competition

Feigenbaum said how much investment will be made in the region's five casinos will depend on what percentage of return their parent corporations are seeking.

"You do whatever you can in your constraints," he said.

Ted Bogich, executive Vice President, operations, for Boyd Gaming, parent company for Blue Chip Casino, said Boyd has already made substantial investments to enhance the Michigan City casino over the last several years, including a floor-to-ceiling remodel of the Blue Chip tower in the last year, and continues to find ways to elevate its guests' experiences.

He said while grateful for the legislation that eased taxation on promotional play to help the commercial industry remain competitive, "we are hopeful that policy makers will continue to focus on additional initiatives that will allow gaming in Indiana to further thrive."

Representatives for Majestic Star Casinos did not comment for this article.

Roxann Kinkade, a spokeswoman for Pinnacle Entertainment, parent company of Ameristar Casino in East Chicago, said the company is aware the South Bend property has been taken into trust, but added "it's not appropriate for us to comment on another company's operation."

Ameristar opened a new $3.5 million sports bar, Stadium Sports Bar and Grill, in 2015.

Karen Caffarini is a freelance reporter for the Post-Tribune.