Indiana moves ahead of Mississippi to third nationwide in gambling

In a state centered around corn, basketball and the Indy 500, gambling would seem to be the last word that would come to mind if you asked someone to describe Indiana.

But that’s the direction the state has taken since the first casino opened in Evansville in 1995 after legalizing commercial gambling two years prior.

Now, with 13 casinos statewide, the industry has taken off, and Indiana is among the ranks of the top gambling states.

In 2009, Indiana overtook longtime gambling hot spot Mississippi as the state with the third-highest commercial gambling adjusted gross revenue in the country.

Despite having a modest number of casinos compared to Mississippi’s 29, Indiana still managed to haul in $12 million more than the southern state, to total $2.58 billion in adjusted gross revenue through commercial gambling last year.

Much of that is due to highly populated areas just outside of the state’s borders, namely Chicago, Louisville and Cincinnati, as well as the laws of the states in which these cities are located, said Mike Smith, executive director of the Casino Association of Indiana.

A three-year-old indoor smoking ban in Illinois has given the five Indiana casinos along Lake Michigan an edge against their rivals on the other side of the border. The outlaw of casino gambling in Kentucky and Ohio has done nothing but help Indiana’s five casinos on the Ohio River.

However, in November, Ohioans voted to allow Cleveland, Cincinnati, Columbus and Toledo to each build one casino, finally approving the referendum after seeing it on the ballot for the fifth time in 20 years.

A new casino in Cincinnati could spell trouble not just for the three Indiana casinos in the area, but for the Indiana economy as a whole.

“Those will have impacts on our revenue,” Smith said. “But also the revenue of state and local government.”

In 2009, Indiana brought in $838 million in gaming tax revenue, according the American Gaming Association. With Nevada only bringing in tax revenues of $924.5 million with 266 casinos, that number becomes more eye-catching.

Indiana taxes its casinos up to 40 percent of their gross gaming revenue, while Nevada only taxes their casinos up to 6.75 percent of their revenue.

Despite the tax burden on the industry, Smith said a limited number of casino licenses help control competition in the state.

While new casinos in Ohio will certainly have an effect on Indiana tax revenue, Smith called the amount of tax money the state brings in with such a small number of casinos “amazing.”

Opponents of the industry aren’t as amazed by the booming business or the tax revenue it brings in for the state.

“This is a realization of how the gambling industry has penetrated the state and how dependent our state government is on gambling revenue,” said Dan Gangler, director of communication for the Indiana Coalition Against Legalized Gambling.

Gangler pointed to vices in the gambling industry that he said are destroying Hoosier communities.

“What seldom is shown is three to five percent of new gamblers become compulsive gamblers, spending as much as $40,000 a year on their new habit,” he said.