Study Says Online Casino Gaming Would Bring Big Bucks To Indiana

A recent study forecasts that Indiana could earn close to $500 million in tax revenue over the next five years if online casino gaming is legalized.

The analysis by Global Market Advisors, commissioned by iDEA Growth and the Casino Association of Indiana, was aimed to assist the legislature in understanding the potential benefits of legalizing iGaming.

Last week, House Bill 1356, an online casino legislation, was introduced by Reps. Douglas Gutwein and Ethan Manning.

Last year, Sen. Jon Ford introduced a similar bill and is hoping to guide it through the Senate. However, the House must first transfer the legislation to the other chamber by Jan. 31.

In a statement, John Pappas, the state advocacy director for iDEA, said:

Indiana has a strong foundation for iGaming through its experience and infrastructure with online sports betting. Unbeknownst to many Indiana residents, they’re currently utilizing unlawful online gaming sites that offer no consumer safety and contribute nothing to the state’s tax revenue. By creating a legal and competitive marketplace, state legislators can satisfy consumer needs, boost the state’s economy and ensure online players are protected by regulatory safeguards.

Projected revenue for online casinos in Indiana

Global Market Advisors predict that the total revenue from online gaming will surpass $600 million when the market reaches maturity. Annual revenue for the entire industry:

• 2023: $420 million
• 2024: $539 million
• 2025: $575 million
• 2026: $599 million
• 2027: $611 million

Global Market Advisers projects that the proposed 18% tax rate in HB 1356 would generate revenue for the state:

• 2023: $75 million
• 2024: $97 million
• 2025: $104 million
• 2026: 108 million
• 2027: $110 million

The tax revenue from the first five years of online casino totals $494 million.

This implies that online casinos could generate significantly more money for the state compared to sports betting. For instance, in 2021, Indiana’s sports betting yielded $307 million in gross revenue and contributed $29 million to state taxes.

Land-based casino revenue would not be negatively impacted by iGaming.

The performance of existing online gaming markets in New Jersey, Delaware, Pennsylvania, Michigan, and West Virginia was assessed by Global Market Advisors (GMA).

GMA debunked the widespread myth that providing online casino games undermines land-based casinos.

This possibility often concerns lawmakers as casinos request a reduced tax rate for online games to compensate for heightened operational and marketing expenses. In Indiana, the tax rate for games in commercial casinos varies between 15% and 40%.

GMA made a comparison of land-based revenues in Pennsylvania with those in other markets nationwide. iGaming was introduced in Pennsylvania in July 2019.

The analysis revealed comparable variations in land-based gaming revenue across all markets, with no noticeable effect on Pennsylvania’s land-based operations.

GMC stated that the differences in experiences offered by iGaming and land-based gaming, and their appeal to different types of players, were the reasons for this.

Indiana iGaming Study Other Recommendations

The report presents the following observations about the legislation to Indiana lawmakers:

• Only operators who have experience in online gaming and will be licensed and regulated by the Indiana Gaming Commission in collaboration with a land-based entity will be granted online gaming licenses.
• Only those within the geographic borders of Indiana will be permitted to place bets.
• A varied iGaming product range will encompass: a slot product with a plethora of titles/themes, table games (both house-banked and player-banked), and live dealer online options, all sanctioned by the Indiana Gaming Commission.
• Indiana already has the necessary infrastructure and regulatory safeguards in place to support responsible gambling behaviors, thanks to mobile sports betting.

The Executive Director of the Casino Association of Indiana, Matt Bell, explained:

The introduction of iGaming in Indiana will revitalize our sector and allow us to compete effectively against our neighboring states that aim to take away our Hoosier customers and their entertainment spending. We collectively believe that the iGaming market provides Indiana with a chance to positively extend our existing regulated environment, without negatively affecting the revenue generated by land-based gaming in the state.

Just like mobile sports betting has expanded our industry’s overall earnings, iGaming will strengthen our bond with current customers and offer us the opportunity to engage with new ones in unprecedented ways.