Suddenly, Northwest Indiana Casinos Encounter Pressure From Illinois

As Illinois SB 690 awaits Gov. JB Pritzker’s signature, various interested groups are ardently preparing for the potential expansion of casinos and the introduction of legal sports betting in Illinois, also known as the Land of Lincoln. This includes gaming operators in Indiana, one of Illinois’ neighbouring states.

Mike Hicks, an economics professor at Ball State University, has compiled data that reveals 70% of the patrons at casinos in northwest Indiana are in fact Illinois residents. The operators of these casinos are legitimately concerned that these habitual customers may prioritize convenience once new casinos open in Illinois.

Indiana casinos must adapt or risk becoming obsolete.

In the context of social Darwinism’s economic applications, for-profit organizations encounter the same environmental pressures that have influenced species evolution on Earth for millions of years. The legalization of sports betting and the establishment of two new casinos in the region where many current patrons of northwest Indiana’s casinos reside serve as examples of this phenomenon.

Economic studies suggest that the easier it is to obtain a product or service, the more likely consumers are to spend their money on it. Reducing the need to travel for gaming experiences not only makes it more convenient, hence reducing resistance, but also saves on travel costs. This leaves more income available for consumers to spend on the actual gaming activities.

Adding to the fact that non-casino venues in the Chicago metro area such as Soldier and Wrigley fields will soon provide legal betting opportunities to fans, the probability of people travelling to Terre Haute for placing bets reduces further. In order to counter this situation, gaming facilities in northwest Indiana will need to emulate the American bison and adapt.

Northwest Indiana's survival plan

A potential strategy could involve leveraging the power of habitual behavior among patrons. Regular casino guests who have developed a routine of frequenting casinos in areas such as Hammond might resist change and willingly shoulder the cost of continued travel in order to stay in familiar territory. Moreover, a robust strategy should balance the cost of travel with the price of goods and services offered.

SB 690 stipulates a 15% tax on sportsbooks in Illinois, additionally escalating the already substantial casino taxes. On the other hand, sportsbooks in Indiana are subject to a 9.5% tax. Furthermore, players must pay taxes on all their winnings. The tax revenue generated from sports betting will provide financial gains to Indiana and its inhabitants.

Indiana’s books could potentially offer better odds due to the lower operating cost. This could also apply to casino games. The lower tax rate in the Hoosier State may enable Indiana’s facilities to provide better payouts at slots and table games.

Moreover, regarding sports betting, Illinois law prohibits betting on all school competitions, including those of the University of Illinois. However, Indiana’s laws do not have such restrictions. Thus, Illinois residents wishing to bet on Fighting Illini American football or men’s basketball games can do so if they are prepared to travel to Indiana.

Land-based legal sports betting, in particular, is not a highly lucrative business in its own right. Rather, it serves more as an attraction to increase foot traffic for establishments that offer it, with the hope that customers will spend money on other more profitable facilities.

The advantages for Indiana

Another strategy that Northwest Indiana facilities can use to fend off new competition is by offering an abundance of luxurious amenities. If the gaming experience — inclusive of entertainment options, accommodations, and menu items — is significantly better than what the new Illinois facilities can offer, then there is a higher probability that Illinois residents will continue to visit.

Current Indiana facilities clearly have an advantage over their future Illinois competitors due to their head start. Illinois has not yet rolled out legal sports betting, potentially allowing Indiana to beat them to it. Likewise, the construction of new casinos in Chicago and southern Cook County has not commenced.

Indiana’s casinos have the opportunity to ready themselves for the impact of these “invasive species”, but they must meticulously construct their strategy. An inadequate adaptation plan could lead them towards the path of extinction, like the woolly mammoth.