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Just hours before the General Assembly wrapped up the legislative session, lawmakers approved a massive, controversial gaming bill that legalizes sports wagering and allows a new Terre Haute casino.

The issue divided both parties, as lawmakers instead split by region and beliefs on the expansion of gambling. Even Rep. Todd Huston, a prominent House Republican who helped finalize the language, voted against his own bill in the end.

House Bill 1015, one of the largest gaming bills in decades, moves up the date that horse race tracks are allowed to use live table games and caps the number of casinos and racinos a gaming operator can own at six, instead of at just two casinos. The result: One operator could have a large share of the industry responsible for a huge source of Indiana's taxes. 

More: Casino boss treated Holcomb to private flights with lucrative gambling deal on the line

More: Casino-investor ties led Speaker Bosma to skip gaming bill vote. Here’s why questions linger.

In an unprecedented move, it also allows Spectacle Entertainment to move one of its two recently purchased Gary licenses miles away from the lakefront to a more traveled area. In doing so, the casino operator would have to give up its second license, which would go to Terre Haute.

The company could later bid against competitors to win it back. Spectacle must relocate one license within Gary in order for the other to move to Terre Haute.

Casino company poised to save millions in taxes

But in a decision that was criticized by some Republican and Democratic lawmakers, the legislation would still only require Spectacle Entertainment to continue to pay taxes as if the operator owned two smaller, lower-revenue-producing riverboat casinos, which could result in tens of millions of dollars in savings.

That tax language never passed either chamber, a situation that Rep. Ben Smaltz, R-Auburn, criticized on the floor Wednesday night. 

Spectacle also would be able to operate just as many games at its future inland casino as it has been able to at its two riverboat casinos combined, making it potentially the largest casino in the state. 

Now the bill, approved by a 59-36 vote in the House and a 37-12 vote in the Senate, heads to Gov. Eric Holcomb, who will decide the fate of Spectacle Entertainment's plans to move a casino to a more lucrative area. 

Holcomb was criticized earlier in the session for accepting a pair of free flights from Spectacle worth a collective $50,000. The arrangement gave owners Rod Ratcliff and Greg Gibson exclusive access to Holcomb.

Earlier version of bill was tougher on casino company

The final bill is a good deal for Spectacle, compared to previous versions of the legislation that moved through the House.

An earlier version of the bill would have required Spectacle to pay a $100 million fee if it wanted to move one of its casino licenses to a more heavily traveled location in Gary, and would have forced Spectacle to remit its second license, without offering any tax-related incentives. In the most recent version, that fee was reduced to $20 million. 

Smaltz said that Spectacle's tax break could come out to $40 million to 50 million over the five-year period it would be in place. 

"This is a monumental policy shift, and this is the beginning," Smaltz said. "...This issue is going to come back and haunt us in the future."

In its final form, the legislation steers some money to Evansville, Hammond, East Chicago, Michigan City and the French Lick resort for potential economic fallout from increased casino competition, if the new casinos perform well.

Those provisions were equally controversial, with Smaltz comparing the constant addition and removal of the "hold harmless" provisions to the back-and-forth of the hokey pokey dance. 

Rep. Randy Frye, R-Greensburg, asked other lawmakers, "What about Southeast Indiana riverboats?" since they won't be receiving any money.

The bill also legalizes sports wagering in casinos and on mobile devices for people age 21 and older. Hoosiers could gamble from anywhere in the state on their mobile devices.

"I'm not excited about having sports wagering in my community anywhere," Smaltz said. "I'm really not excited about what happens in six years when there's new people here (in the General Assembly)."

Is mobile sports wagering a slippery slope?

He wondered whether future lawmakers would see any issues with allowing Hoosiers to participate in mobile gaming beyond sports, because they could already wager on their phones.

But the bill also had plenty of supporters, who saw the bill as an opportunity for growth in Indiana and a fair deal with casino owners.

Rep. Sean Eberhart, R-Shelbyville, argued lawmakers "continue to take and take" from casino operators.

Sen. Eddie Melton, D-Gary, said the bill has the ability to turn the tide in Gary. The city has been working to rebuild over the last 50 years, he said, and this bill could help grow the tax base — improving public safety, schools and more — without relying on a handout from the state.

“I don’t think of this only as a gaming bill,” he said. “I see this as an economic development catalyst.”

The final decision on the bill now rests with Holcomb, who said that, on one of the flights with Spectacle executives, he "overheard some discussions that they were having amongst themselves (regarding casino plans) but it wasn't asking me questions."

Holcomb's campaign treasurer, Indiana Republican Party Chairman Kyle Hupfer, defended the flights as "perfectly legal and customary." He said the flights, to two Republican Governors Association meetings out West, were arranged by that organization, which he says often flies governors to its conferences.

The arrangement, however, raised questions about Spectacle's attempts to influence legislation.

In another situation that raised conflict-of-interest questions, House Speaker Brian Bosma said last week he was recusing himself from voting on any gaming legislation because his law firm is providing legal representation to the Vigo County Capital Improvement Board — a local entity that stands to benefit from a Terre Haute casino. 

That contract was arranged by Gibson, who at the time served on the board.

While Bosma didn't vote, he participated in private discussions with other lawmakers and casino companies about the bill, which raised ethical red flags for Julia Vaughn, policy director for the government accountability group Common Cause Indiana.

He stayed away from the floor Wednesday night, as both chambers voted to send the legislation to Holcomb.

Call IndyStar Statehouse reporter Kaitlin Lange at 317-432-9270. Follow her on Twitter: @kaitlin_lange.