Indiana’s chances of legalizing online casinos in 2024 have all but vanished in a heartbeat, with the leaders of both halves of the state legislature agreeing that any gaming legislation is a non-starter in 2024. Senate President Pro Tempore Rodric Bray and House Speaker Todd Huston have nixed the possibility due to a corruption scandal stemming from the 2019 sports betting bill.
Former Indiana House Rep. Sean Eberhart has pleaded guilty to federal corruption charges. He admitted to taking a bribe in the form of a job offer from Spectacle Entertainment Group in return for supporting House Bill 1015. This retail casino operator formerly owned the two Majestic Star riverboat casinos in Gary.
The law in question was an omnibus bill. In addition to authorizing sports betting, it made various tweaks to the state’s existing retail gambling laws, including allowing table games at racinos. Most importantly to the corruption case, it specifically authorized Spectacle, by name, to relocate its license from the Gary waterfront to a better location inland, near the intersection of Burr St. and the Frank Borman Expressway.
After moving its license, Spectacle struck a deal to sell it to Hard Rock International, which now operates there as Hard Rock Northern Indiana.
Indiana had been considered by many to be a shoo-in for online casino legalization in 2023. That effort stalled but was set to resume next year. That now won’t happen. Interestingly, similar provisions to relocate underperforming casino licenses had been mentioned as a possibility for inclusion in the 2024 version of the bill. That would have made for terrible optics in the aftermath of Eberhart’s guilty plea.
Illegal Campaign Contributions
The corruption scandal has been unfolding over the course of years. In September 2020, federal authorities indicted Spectacle founder and vice president John Keeler on charges of conspiracy to violate federal election laws. He was also charged with making false statements and obstructing justice.
Eberhart had apparently been promised a job with Spectacle and a $350,000 annual salary in return for supporting the omnibus gaming bill.
In light of those charges, on Dec. 23, 2020, the Indiana Gaming Commission (IGC) ordered Spectacle to cut ties with Keeler. In February 2021, it issued a similar order for the company’s CEO and chairman, Rod Ratcliff, before permanently revoking his license in March.
Spectacle was slow to react to the latter order, resulting in a $530,000 fine and a temporary halt to its deal with Hard Rock. Nonetheless, the casino managed to open on time in May 2021.
Indiana’s Failed 2023 Online Casino Effort
The corruption scandal notwithstanding, Indiana was something of a poster child for online sports betting in the US in the early going. It was the first state in its part of the country to authorize the newly available gambling option. The revenue it began raking in from that persuaded most of its neighbors to follow suit. That success also spurred hopes that online casino gaming would follow.
Former Senator Jon Ford led efforts in 2021 and 2022 that both stalled. However, the industry seemed to pick Indiana as its horse to back in 2023, and many hoped that would be enough to push a bill through.
One obstacle was that Bray, as the Senate President Pro Tempore, had emerged as an opponent. Ford elected to take a back seat and allow the effort to begin in the House of Representatives this time, with Rep. Manning and his HB 1536.
Ultimately, the effort failed and did so quickly. Manning said he could have pushed the bill through committee but that it was pointless to do so, as the floor wouldn’t vote on it.
Much of the blame for that went to the Indiana Legislative Services Agency for what some called “fiscal note poisoning.”
In its note appended to the bill, the Agency predicted that online casinos would cause a drop of up to 30% in Indiana retail casino revenue. To make that argument, it leaned on a questionable study from 2011, before any online casinos had launched in the US. Competition with a separate bill to legalize video gaming terminals (VGTs) may have complicated matters further.
Echoes of 2019 Spoil a Potential 2024 Online Casino Push
Ford resigned from the Senate in September 2023 to pursue “new professional endeavors.”
But, before he stepped down from his position, Sen. Ford told the National Council of Legislators from Gaming States (NCLGS) that another effort was coming in 2024. He spoke on the topic at the organization’s summer meeting and said he expected the next attempt to be part of a larger gaming modernization bill.
Ford gave examples of things such a bill could include, such as better responsible gaming protections and advertising reform. More importantly, though, he suggested that it might include an opportunity for underperforming retail casinos to relocate to more lucrative areas of the state.
Including such incentives for retail operators in an online gambling expansion bill is often the only way to get it to pass in the face of concerns about revenue cannibalization. However, the similarities to the 2019 sports betting bill would have proven controversial in the wake of Eberhart’s guilty plea.
Bray told WBAA that these events firmly take any potential legislation off the table in 2024 and perhaps beyond, saying it “taints the Statehouse.”
That’s unsurprising, given that he was an opponent of earlier efforts to begin with. However, his counterpart in the House, Speaker Huston, expressed a similar opinion. With Manning and his peers now facing a similar stonewall attitude in the House that Ford did in the Senate, the odds of anything happening for online casinos in Indiana next year appear to have become vanishingly small.
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