Originally, the bill would have provided cuts to only three casinos – the new racinos in Anderson and Shelbyville that are struggling to pay debt left by hefty state licensing fees, and Blue Chip Casino near Michigan City that is losing business to a Native American-operated gambling venue in Michigan.
But today, the House voted to expand the promotional tax break to the state’s original casinos and limited it to the next four years. As amended, the bill would allow casinos to deduct from their wagering income some of the free credits or game plays they give customers as promotions. Currently, those plays are counted as wagering revenue and taxed.
The deduction only applies to the amount of promotional credits that exceed the previous year’s total. So if a casino had $2 million in promotional credits this year and $5 million next year, it could deduct only $3 million from its 2010 taxable wagering income.The deduction also is capped at $5 million per casino per year.
Mike Smith, executive director of the Casino Association of Indiana, said the bill would encourage gambling boats to increase their marketing budgets, which could boost wagering and maybe taxes paid to the state.
“Being the most highly taxed business in the state, we appreciate the changes made to the bill,” Smith said. “In other jurisdictions this is a deductible expense from dollar one.”
The state is facing its worst economic downturn in decades and the legislature is more concerned about awarding tax breaks to casino owners than finding a way to fix Indiana's bankrupt unemployment insurance trust fund.