CEO Dan Lee told analysts that opponents to a new Indiana casino have an advantage thanks to final changes in House Bill 1038
Indiana lawmakers, just before their annual session ended late last month, reached an agreement on a measure that opens the door for a commercial casino in Fort Wayne or elsewhere in northeastern Indiana. However, in doing so, legislators may have made it easier for opponents in and around the state’s second-largest city to defeat the measure when voters go to the polls in November.
House Bill 1038, which Gov. Mike Braun signed into law last Wednesday, requires Allen, DeKalb, and Steuben counties to hold referendums on whether residents want a casino in their home county. Legislators debated that portion of the bill during the General Assembly session. The House version of the bill required elected officials to approve a referendum first for their own county, but the Senate took out the referendum requirement.
Braun told Fort Wayne TV station WANE last week that a referendum was necessary in order for him to sign the bill.
‘Well-Funded Opposition’ to Challenge Casino Referendums
As written into law, though, one gaming executive fears hopes for a casino in any of the three counties will likely face “well-funded opposition” to plans for a $500 million casino resort in their community.
It would be problematic for us or anyone else to try to fund the pro side of any county… You’re going to have three referendums where the opposition is probably well funded and the pro side probably isn’t,” Full House Resorts CEO Dan Lee told investment analysts on his company’s quarterly earnings call last week.
“So will it pass or not? I don’t know. Normally these things do pass because it produces jobs and tax revenues and so on. But the way the legislature has set this up – and I think it’s inadvertent – but I think the way they’ve set it up, those are going to be very challenging referendums.”
Lee said Full House is in wait-and-see mode and said that the opposition group, which has a website SaveFW.com, may be funded by a tribal gaming nation in nearby southern Michigan or another entity that would be hurt by a casino opening in or near Indiana’s second-largest city.
The Las Vegas-based gaming company had been supportive of the measure, which, based on initial drafts, would have allowed it to close its existing casino in Rising Sun, a small town in southeastern Indiana, and seek to build a larger one in the Fort Wayne area.
Rising Star Staying Put
Another change lawmakers made to HB 1038 was the creation of a new casino license for one of the three counties. In other words, Full House would not need to close the Rising Star Casino Resort if a northeastern Indiana county received a casino.
Lee reiterated to analysts last week that Full House makes money, albeit not much, with the small casino that finds itself surrounded by numerous gaming outlets in southeastern Indiana, as well as neighboring northern Kentucky and nearby Cincinnati. That’s why the company suggested to the state it would be better to move the casino to an urban center.
SEE ALSO: Indiana Legislature Passes Sweepstakes Casino Ban
A study conducted by Spectrum Gaming Group determined that the state would make significantly more money with a casino in either downtown Indianapolis or in Fort Wayne. An Indianapolis casino would generate more than $170 million annually in gaming taxes, while a Fort Wayne location would create more than $61 million.
By comparison, the Rising Star generates about $1 million in gaming taxes each year for the state.
Wait Till Next Year?
When the bill moved from the House to the Senate, lawmakers changed the license fee from $50 million (plus $30 million to the Rising Sun area) to $150 million.
The higher license fee stayed in the final bill. HB 1038 also calls on the winning developer to invest at least $500 million into the project – nearly twice what Churchill Downs spent when it opened its Terre Haute Casino Resort two years ago. Churchill also paid $5 million for its license.
A $500 million investment in Fort Wayne or elsewhere in Allen County may be feasible. It may not in DeKalb or Steuben counties, both of which are significantly smaller in population.
It’s not beyond reason that Full House and perhaps other operators would pass on the opportunity to build a casino in northeastern Indiana – again, if voters in at least one of the counties approve the referendum eight months from now. Should that happen, or should voters in all three counties vote down the referendum, the issue could go back to the General Assembly next year, with Indianapolis as a potential site for a casino.
Efforts to include Indy as a possibility in this year’s bill were unsuccessful. While the Spectrum study determined Indianapolis was mostly an untapped market, calls for a casino there would have faced opposition from Churchill’s Terre Haute resort and two racinos operated by Caesars east of Indianapolis. All three of those facilities are within an hour’s drive of the city.
Lee did not come out and say that’s where Full House stands, but he may have tipped his hand.
“We will watch the process and see what happens,” he said. “The legislature meets again next year. We know where it meets.”
Stay updated with GI
Follow Gambling Insider for independent news, analysis and industry expertise.
Gambling Insider delivers the latest industry news, in-depth features, and operator reviews that you can trust. Our team combines rigorous editorial standards with decades of specialized expertise to ensure accuracy and fairness. We are committed to delivering clear, impartial, and dependable coverage across the global gambling sector.
Advertisements: