Rich James: Trouble on the horizon for Northwest casino cities
Thursday, December 15, 2016 10:32 AM
MERRILLVILLE – It seems like yesterday, but alas, it has been 20 years since the first casino opened in Northwest Indiana. It was June, 1996, when the Majestic Star Casino opened in Gary. A day or so later, Trump Casino opened its doors adjacent to the Majestic Star. Showboat Casino soon followed in East Chicago, with the Blue Chip Casino in Michigan City and Empress Casino in Hammond rounding out the five casinos in the northwest corner of the state.
They, of course, were competing with a couple of casinos just to the west in Joliet, Ill. It seems hard to imagine at this point, but the Joliet casinos were charging admission when they first opened. There is something wrong with having to pay to gain the right to lose your money.
With the gambling industry still relatively new in Lake and LaPorte counties, already there is trouble on the horizon. And those likely to suffer the most are the Gary, Hammond, East Chicago and Michigan City casinos that opened with the intent of returning luster to the industrial rust belt in that corner of the state. Now, the Pokagon Band of Potawatomi Indians has started construction on a second Four Winds Casino in South Bend. The first opened in New Buffalo, Mich., a few years back. A study sponsored by the Casino Association of Indiana is forecasting some dire consequences for Indiana’s casino industry based on the 2018 opening of the South Bend casino.
Among the consequences is a gaming and income tax revenue decline of $355 million over five years and the loss of 732 jobs in the commercial casino industry. The study also projects a loss of $3.8 million in local development agreement payments to the cities of Gary, Hammond, East Chicago and Michigan City over the next five years.
Those monies are critical to the host cities who use the revenue to substantially supplement their budgets.
Spectrum Gaming, which conducted the study, said gambling revenue at Indiana casinos has dropped $2.2 billion, or 21 percent over the year that ended in September.
Expanded competition in Michigan and Illinois account for most of the loss. The study also predicts Indiana gaming revenue will decline another $800 million over five years with a decline of $282 million in gaming tax revenue. The less stringent taxing guidelines and revenue dispersment requirements give the Native American casinos a substantial financial advantage over the commercial operations that opened 20 years ago.
Consequently, Matt Bell, the casino association president and CEO, made it perfectly clear that casino industry needs to meet with state policy makers to discuss ways to aid the existing industry. That likely will be a focus of the General Assembly that convenes in early January.
Rich James has been writing about state and local government and politics for more than 30 years. He is a columnist for The Times of Northwest Indiana.