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.
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: