Friday, June 01, 2007

Daniels Trying To Fix Flawed Slot Legislation

Gov. Mitch Daniels is trying to recoup the hundreds of millions of dollars lawmakers left on the table when they set the franchise fee for slot machines at the state's two horse race tracks at $250 million. Gaming observers noted at the time that other recent deals involving sales of gaming casinos netted far more than the $250 million buy-in fee set by the legislature. Daniels wants the slot machine operators to share one half of any profits they get from the sale of a license according to the Star, which reports:

The state wants up to 50 percent of any profits if slot machine operators at Indiana's horse tracks decide to sell a stake in their lucrative slots licenses, Gov. Mitch Daniels said today.

Daniels suggested the Indiana Horse Racing and Gaming commissions might reject any license transfers unless the license holders comply.

The intent, Daniels said at a Statehouse news conference this morning, is to "strengthen the protection of the public interest by ensuring that, if and when the true value of the licenses is paid, the taxpayers of Indiana share appropriately in the benefits."

His comments come about a month after the General Assembly approved legislation legalizing up to 2,000 slots each at Hoosier Park in Anderson and Indiana Downs in Shelbyville.

The slots law calls for the license holders to pay the state $250 million up front, as well as invest at least $100 million in the race tracks. License holders also will pay a graduated 35 percent tax on any slots profits each year. The General Assembly directed all of the money to a property tax relief package.

In addition, the law restricts license holders from selling a controlling stake in their licenses unless the holders gain state approval and reimburse the state.

Yet Daniels said the legislation contains a loophole that allows the license holders to sell a minority interest and get a windfall profit without sharing those profits with the state. The governor believes each license might be worth much more than the initial fee the state is collecting. The Horse Racing and Gaming commissions, he said, will adopt emergency regulations spelling out the new ground rules.

10 comments:

Anonymous said...

What hundreds of millions of dollars are you talking about? The $250 million license fee to be paid by each track is 5x any previous state-sanctioned fee. As for potential auction value, there have been only two previous auctions of gaming licenses. One, in Rosemont, Illinois, has yet to deliver a gaming facility or income to the state. But it has delivered plenty of criminal charges, for corruption and bribery. Speaking of corruption and bribery, the other auction took place in New Orleans, for the land-based casino that became Harrah's. The upfront costs were so great, after the auction, that the casino failed (how often does that happen?), filed bankruptcy, and sat empty for seven years. Eventually, terms were renegotiated, the corporation was reorganized and it reopened. All of the so-called more-profitable recent deals involved existing facilities, not simply licenses. The difference? They didn't have to build, too.

Anonymous said...

I'm so confused by all this...I thought this deal was sealed and done in the last session.

Who effed up?

Anonymous said...

This is not good news for Churchill Downs, Inc.

They were hoping to get back in via Centaur when the slots legislation went thru. Centaur still owes CDI several million off the recent sale.

The Guv obviously saw thru this one and he does control the Gaming Commission.

Anonymous said...

So Mitch is just protecting the local political insiders in their negotiations with Churchill Downs for a better deal?

Anonymous said...

Advance Indiana pointed out the many flaws in this bill well before it ever landed on Mitch's desk for his review.

I guess this is a PR stunt with little substance to cover his @#%.

Its clearly too late for Mitch to try to rewrite the bad bill he just signed.

10001110101 said...

you will remember the Star reported that Pinnacle Gaming (owner of Belterra, I think) offered to START the bidding at $300M for a slot license at the track. Therefore, we know that at least $100M was left on the table.

10001110101 said...

While the Star was reporting what was said during the hearings and what was spoon fed to them by the legislators pushing the bill, Advance Indiana was reporting on the connections, who stood to benefit and asked why the general assembly was leaving so much money on the table. Hey! Why did the general assembly leave so much money on the table?

Anonymous said...

well, it IS the Indiana legislator.

Where an Ivy Tech schill runs the House.

And, until recently another Ivy Tech schill ran the Senate.

And where ployester brains rule.

Go figure.

Harrison Ullman was right.

Wilson46201 said...
This comment has been removed by a blog administrator.
Anonymous said...

Harrison would say don't let my fat fingers do so much walking on a small Blackberry keyboard.

And he would also say, schill is a North Europe whitefish, for whom the common term shill is taken...and not to be so picky about the spelling. Concentrate on the message.

And he'd say quit being so overtaken on the anonymous thing. People have their reasons. Is anything written untrue? Nope. Lighten up.

And alas, Wilson, he would still say, This is America's Worst State Legislature. By a bunch.

God rest his soul.