INDIANAPOLIS – A controversial gambling bill continues to morph as Indiana legislators wrestle over the state’s role in protecting the gaming industry from increasing out-of-state competition.

On Wednesday, the House public policy committee removed sections of the Senate-passed bill that would have allowed riverboat casinos to move onto land and would have cleared the way for racetrack casinos to hire hundreds of new employees to man live table games.

Both provisions were seen by critics as an expansion of gambling — something that the Republican committee chairman, Rep. Bill Davis of Portland, made it clear he opposed.

Yet Davis also acknowledged the legislation, Senate Bill 528, is a work in motion, likely to be altered again before it reaches a final vote.

“I can assure you folks: we haven’t seen the last of this,” Davis said.

Rep. Terri Austin, a Democrat whose district includes the Hoosier Park racetrack casino in Anderson, agreed: “This bill is not over.”

The House committee also restored the amount of gaming tax revenues paid to communities where the casinos are located, along with the smaller share of gaming tax revenues divvied up among all other Indiana counties. The Senate version of the bill reduced those revenues significantly, diverting the dollars into state coffers instead.

“That revenue is vital to those local communities,” said Republican Rep. Randy Frye of Greensburg, whose southeast Indiana district includes three riverboat casinos.

Since Indiana legalized casino gambling in the mid-1990s, the state has collected more than $10 billion in gaming taxes. But as more states, including Ohio, add casino gaming, the revenue stream has started to fall.

Patronage at the state’s riverboat and land-based casinos has fallen to under 2 million for the past six consecutive months. That’s the longest such streak in a decade. In January, Indiana’s five floating casinos on Lake Michigan saw their lowest revenues since December 2001. The six southern Indiana casinos had their worst month since January 2003.

“Let’s not pretend the wolves are not at the schoolhouse door,” Austin said.

She vehemently disagreed with Davis’ characterization that allowing the racetrack casinos to switch from automated table games over to live table games manned by dealers constituted expansion. She argued the number of table games won’t grow, but the number of employees would by about 800.

“I don’t see this as an expansion of gaming and I don’t think the people in my community do either,” Austin said.  

Her comments were echoed by Rep. Sean Eberhart, whose district includes the Indiana Grand horsetrack casino in Shelbyville.

“It’s mindboggling that people look at this as an expansion of gaming,” Eberhart said.

Indiana Gov. Mike Pence has already weighed in on the issue, saying he would oppose both the live table games at the racetrack casinos and any effort to allow the riverboat casinos to move onto land.

“I’d like to meet with him face-to-face to try to change his mind,” Austin said.

The bill now moves to the House Ways and Means Committee, where another change to the Senate version of the gaming bill will be scrutinized.

The Senate version eliminated the admission tax that casinos pay to the state, and did away with a 2002 “hold harmless” agreement that secured at least $40 million in state payments to casino communities from the admissions tax. The result would be a cut of $13 million to casino communities in the first year, and an increasing amount in following years.  

That part of Senate Bill 528 was removed by the House public policy committee Wednesday after local government leaders from those communities spoke against it.

The House committee left intact the provisions in the Senate bill that would do away with taxes on up to $2 million worth of free-play coupons at each casino and provide $40 million in tax credits to casinos that invest more money into their operations.

Maureen Hayden covers the Statehouse for the CNHI newspapers in Indiana. She can be reached at maureen.hayden@indianamediagroup.com.