The latest newcomer to join a growing list of states seeking out opportunities from legalised sports betting is Indiana. Last month, the state’s Gambling Commission secured the services of market analysis firm Eilers & Krejcik to conduct a series of studies evaluating sports betting as part of a contract that’s scheduled to run for a two-year period.
Why the interest? Currently Indianapolis has 13 commercial casinos, 11 of which are located on its state lines. Between them they contribute circa $3.8bn in economic activity, with gaming supporting 24,399 jobs and generating more than $1bn in wages. Gaming generates $1.3bn in federal, state and local tax revenues including $536.7m in gaming taxes. So, in theory, a legal sports betting market would only add to the state’s bottom line.
A cursory glance at the last few annual reports filed by the Commission suggests that something is needed to bolster that bottom line. Tax revenue generated by gaming in Indiana has declined in recent years with the economy and increased competition from neighbouring states such as Ohio shouldering the blame. With fewer admissions, Indiana’s casinos risk the daunting prospect of relying on less people coming through their doors, but spending more on their services.
Take the annual report for 2017 by way of example. Executive director Sara Gonso Tait summarised: “With a total state-wide win of $2,220,174,297, an $8.5m decrease from FY 16, or a 0.4% decrease, casino revenues remained relatively unchanged. Both admissions and wagering taxes declined, however, likely due to increased competition in surrounding states. Admissions declined by 892,000 or 5.3%. Wagering taxes declined by less than 1%, indicating that play by patrons partially offset the decrease in admissions. Wagering and admissions taxes combined totaled $596,918,011 in FY 17. This is a decrease of approximately $7.7m from FY 16, or about 1.3%.”
That, and previous reports, paint a clear picture of Indiana state gambling that’s performing OK in the context of a challenging trading climate, but definitely in need of a shot in the arm. Its governors appear to have already recognised as much, although previous attempts to create meaningful legislation have faltered with a draft bill yet to survive long enough to reach the statute book.
But there’s evidently a will to get sports betting across the line. Lawmakers just need to be confident that they can create a way to win the hearts, minds and discretionary spend of bettors who are already making wagers with unlicensed, unregulated betting providers. How much the state will recoup from that spend is open to speculation, but anywhere up to circa $19m per annum has been mooted.
We suspect that Indiana’s policy makers won’t be hanging around for too long in their bid to get sports betting off the ground. Eilers & Krejcik may have been contracted for two years to gather their data and findings, but a fully functioning sportsbook offering in the state will come sooner rather than later.