Hoosier Park struggles to stay profitable
Racino seeks relief from high licensing fee, tax rate
By Aleasha Sandley, Herald Bulletin Staff Writer
Rep. Jack Lutz, R-Anderson, said he expected Rep. Charlie Brown to amend a bill concerning Indianapolis’ Capital Improvement Board today to also include items about gaming.
“I think some things that (casinos) are asking for that might be introduced tomorrow would be worthy of consideration,” Lutz said Monday.
He said solutions to the casinos’ problems could include the reduction of required payments on their adjusted gaming revenue and allowing local governments that benefit from casinos to deduct what they pay the horse industry before paying the state gaming tax.
“They’re asking for some help, just as the CIB in Indianapolis is asking for some help,” Lutz said. “At least let Madison and Shelby counties be given the tools to help the situation.”
Brown said bringing slot machines to Hoosier Park and incurring the $250 million fee really was not a choice on the part of Centaur Gaming.
“The racing industry has declined over the years, and Hoosier Park was not making money prior to the slot legislation and Hoosier Park at that time received a subsidy from the riverboats,” he said. “With the passing of that legislation, the subsidy was going to go away.”
Brown said without the high licensing fee or tax structure, the casino would be operating fine.
“It has placed a tremendous financial burden on us absorbing the cost of this,” he said. “It was done on speculating what revenue there would be that could handle the cost incurred of the $250 million license fee and any interest in borrowing money. Now, a year later we’re seeing that revenue levels produced don’t match the burden of a license fee that high and ongoing tax and fee structure.”
Yelton said no one could predict what kind of bankruptcy Hoosier Park could go through if it came to that. Historically, though, both Indiana casinos and those in other states have gone through reorganization bankruptcies.
“In all those cases, gaming didn’t skip a beat,” he said. “Doors were always open, jobs were always secure.”
Anderson Economic Development Director Linda Dawson said without an operating Hoosier Park, the city would lose 900 jobs and $2.5 million to $3 million in annual revenue.
“Without that revenue, it would result in drastic cuts in city services,” she said. “If those millions of visitors would disappear, it would have a drastic effect on the service industry.
“For a city to be accustomed to having a casino operating and considering the recent House Bill 1001 effect of reducing income to the city, the Hoosier Park casino could easily be classified as a lifeblood to the city at this point.”
Dawson said Hoosier Park had not received tax abatements from the city and city officials could do nothing to help the casino’s financial situation.
“There’s only one way of alleviating this concern, and that’s for the state to step up to the plate and admit that the original gaming fee of $250 million was extraordinarily high compared to anyplace else in the nation and the percentage of taxes they’re charging to the racinos was extraordinarily high,” she said.