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Casinos see jackpot with new casino tax law

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Casinos see jackpot with new casino tax law

New legislation that changes the way Indiana casinos are taxed is drawing praise from area casino operators, who said it should result in some cost savings and help enhance their competitiveness.

Area legislators, on the other hand, had mixed opinions, depending on how the changes affected the communities they serve.

"Boyd Gaming strongly supports House Bill 1350, which we see as a very positive step for Indiana's gaming industry. It will provide our industry with stability from a tax perspective, and it will encourage additional re-investment in Indiana," said David Strow, a spokesman for the parent company of Blue Chip Casino and Spa in Michigan City.

Casino operators were especially happy that the bill, which was signed into law May 2 by Gov. Eric Holcomb, will phase out an add-back tax over eight years and switch them from an admissions tax to a supplemental wagering tax, which is based on a percentage of gross gaming revenues.

Dan Nita, senior vice president and general manager of Horseshoe Hammond Casino, said Indiana casinos are the only businesses in the state that are required to pay the add-back tax, which he said is a tax on a tax.

"We are encouraged that the state is supportive of a few measures that will enhance the competitiveness of our casino operations. They recognize that no other business in the state is required to pay income taxes on other state taxes, which as we know, are quite significant," Nita said.

Nita said all the casinos in Indiana are also transitioning from a $3 per person admissions head-tax to a supplemental wagering tax.

"The net effect is neutral for the operator and the local jurisdictions in nearly all cases," Nita said.

State Sen. Linda Lawson, D-Hammond, said she was in support of the bill after learning from Mayor Thomas McDermott Jr., that it would not hurt the city of Hammond.

"Our local agreement with Horseshoe is better than what some other communities have," Lawson said.

But Sen. Karen Tallian, D-Portage, voted against the bill, saying Michigan City and LaPorte would be hit financially with the switch to a supplemental wagering tax.

"Both Michigan City and LaPorte will lose some distribution under the change," she said.

Blue Chip has said that it was hit especially hard by the admissions tax, which is charged every time a person enters the casino, after it made a number of improvements at its Michigan City location about 10 years ago.

"We've added a new hotel tower, an events center, a spa and several new restaurants. These amenities have significantly increased our visitor traffic -- and because of the way the admission tax is structured, our tax payments have gone up significantly as well," Strow said.

He said the transition to a supplemental wagering tax will end that unintended outcome.

"It will provide Blue Chip with much-needed stability from a tax perspective. And it should encourage other Indiana casino operators to continue re-investing in their properties. We operate in an extremely competitive regional gaming market, so anything Indiana can do to encourage re-investment will help ensure our future success," Strow said.

Troy Stremming, a spokesman for Ameristar Casino in East Chicago's parent company, Pinnacle Entertainment, said the company also believes House Bill 1350 is a good piece of legislation.

"The modernization of the admission tax and the add-back tax were the most important to Ameristar," Stremming said.

He said while the change in the admissions tax is revenue neutral for the casino, the processes associated with counting guests has been cumbersome. He said shifting to a percentage of gross gaming revenue is much better.

"The current add-back tax is unfair," Stremming said. "We are paying taxes on gaming revenue twice. Indiana is the only state to have such a policy. We will see some cost savings from that change and could use it for marketing or property improvements."

Tallian agreed that that the add-back tax should be eliminated.

"It is in fact a double tax," she said.

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

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