Indiana Omnibus Gambling Bill Proposes Online Casinos and Instant Online Lottery Games

The Indiana state flag flying in front of the US flag
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An Indiana lawmaker is set to introduce new gambling legislation that would legalize both online casinos and online lottery sales in the Hoosier State. The proposed online lottery would include e-Instants as well as sales of conventional draw tickets. It would also allow lottery couriers to operate as regulated businesses alongside the new online lottery.

Rep. Ethan Manning will introduce House Bill 1432 on January 21 when the state’s 2025 legislative session begins. The bill would see a bold expansion of gambling in the state as Manning hopes to create greater revenue funds for Indiana.

HB1432 represents a fresh start for Indiana. Although there was a promising online casino effort underway in 2023, all discussion of gaming expansion was put on hold in 2024 due to a political scandal. Former state representative Sean Eberhart had pleaded guilty to federal corruption charges, causing the leaders of both halves of the legislature to nix the possibility that year. Eberhart had admitted to taking a bribe in order to support a 2019 gambling expansion bill, so the feeling was that it would be poor optics to consider additional expansion while he was still awaiting sentencing.

Should the bill pass, Indiana would see many new avenues of online gambling introduced. All of these new additions would be regulated by state government services.

Each eligible casino to host up to three online partners

Indiana would become the eighth state to legalize online casinos in the US if HB1432 is successful.

Oversight for iGaming would be run by the Indiana Gaming Commission. Each state casino, riverboat and racetrack would be eligible to apply for an online license that allows slots and table games. The licenses would cost $500,000 apiece, and up to three skins could operate on each license.

The tax rate proposed is 26% for all Indiana online casinos in their first year of operation. After that, there would be a sliding rate based on the adjusted gross receipts of each operator. The low would be 22% for operators with less than $4 million in AGR the previous fiscal year. The high would be 30% for operators with more than $12 million in AGR in the previous fiscal year. Those rates are just slightly higher than neighboring Michigan, which has a 20-28% range for its online casino tax rate.

Indiana online lottery to include draw, instant games

Although the prospect of online casino legalization has garnered the most media attention, it’s significant that the bill would establish an Indiana online lottery at the same time.

The Indiana Lottery Commission would be in charge of the expansion, which would allow for online sales of draw and instant games.

Indiana would be joining the likes of neighboring states, Michigan and Illinois, which have already established a state-run iLottery.

The online sale of instant lottery tickets has been a big boost for North Carolina in the last year. Launching in November 2023, the state saw over $1 billion in sales of its Digital Instants in its first seven months of operation.

Along with legalizing a state-run online lottery, HB1432 calls for regulation of lottery courier services in Indiana. Currently, Indiana does not allow such services to operate in the state.

Lottery couriers take online orders for retail lottery tickets in states that have allowed them to operate. Ordinarily, they are an alternative to a true online lottery. For instance, Ohio doesn’t have a state-run online lottery, but it permits couriers like Jackpocket and Jackpot.com to serve residents as a convenient way to buy tickets without visiting a store in person.

Responsible gaming program to be established

On top of online casinos and online lottery, HB1432 includes a number of other important conditions and additions.

  • Establishing the Indiana Responsible Gaming and Problem Gambling Services Program. Funding for the program would see $500,000 annually come through tax revenue generated by the expansion. Operators would be billed further costs that were created through the legal gambling means.
  • Live dealer studios for the online casinos would need to be located within the state.
  • Pull tab games would become legal in Class II gaming establishments.

Eberhart scandal still casts a shadow over Indiana

HB1432 proposes an aggressive timeline for launching online casinos.

It lists legalization taking place on July 1, with operators being able to launch as soon as September 1.

There are still a number of hurdles to clear before this bill can become law. It starts with the House committee reading on January 21.

Indiana passed online sports betting legislation in 2019. However, the scandal involving Rep. Eberhart stifled further gambling expansion in the state.

Eberhart played a role in overseeing gambling legislation in Indiana. He admitted to taking a bribe in the form of a job offer from Spectacle Entertainment Group in return for supporting House Bill 1015, which allowed Spectacle to relocate its location. That ultimately allowed it to sell to Hard Rock International.

As Indiana faces funding issues with transportation infrastructure, as well as Medicaid, gambling expansion could be a solution. These concerns may be enough to help Indiana legislators move past the Eberhart scandal.

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