Gambling hasn't always been legal in the United States, with Las Vegas legalizing the activity only during the Great Depression era in the country. Four decades later, casino gambling was legalized by the city of Atlantic City, New Jersey. For decades more, that's how gambling remained in the United States: Legal in two cities, outlawed in the rest. The 21st century saw a turn toward legalization in all fifty states, however, and that has put pressure on some states to modernize their approach.
In Indiana, casino gambling was legalized for riverboats in the state, but that same legalization did not apply to casinos that were established on land. Instead, those who wanted to gamble had to go on vacation to one of the state's many waterfront communities in order to do so. In recent years, though, legalization of casino gambling in neighboring states has had a pretty significant impact on Indiana's riverboat gambling industry.
The Problem: Riverboat Gambling Just Isn't Convenient
Indiana currently has 13 active gambling licenses issued to riverboat casino companies statewide. When compared to states of similar size, Indiana actually has a robust number of casinos that should be convenient for everyone in every part of the state. That ideal, though, just isn't the case. Riverboat casinos are small and expensive, and they lie only in areas where waterways make it convenient and affordable for them to operate. In areas where they don't make sense or are not possible, Indians just don't have access to casinos.
When they do decide to head to a casino for a gambling outing, they're less likely to visit a riverboat casino and more likely to drive to Ohio or Illinois. Those states operate traditional casinos that are larger, more enjoyable, and offer a wider variety of games that meet more consumer demands than the options found on Indiana's waterways.
A Significant Drop in Gaming Revenue in the Last Several Years
Since casino gambling was legalized in Ohio and Illinois, those states haven't been shy about establishing major casinos within close driving distance of many Indiana communities. They're in the business of competing for tax dollars and revenues, after all, so targeting the lucrative Indiana market just makes sense. The problem, though, is that this competition has caused a steep decline in revenues at Indiana's 13 riverboat casinos.
In 2012, revenue was down 12 percent from the year prior. In the next three upcoming years, state officials estimate that the state will lose 15 percent of it gaming revenue, year-over-year, for each year that the casinos are in active operation. While the revenue loss is bad enough, the real concern is that the casinos may no longer be profitable to operate. That could force consolidation and even layoffs statewide.
A Jobs Issue: Why Land-Loving Casino Operators are the Next Step for Indiana
The steep drop in gambling revenue would put Indiana's budget into turmoil in the years ahead, especially because the state derives a significant amount of education funding and other budgetary funds from the activities at its 13 riverboat attractions. The real problem, though, is that the consolidation of casinos due to a lack of revenue could put thousands of jobs at risk at a time when Indiana is finally beginning to recover from a deep economic recession.
According to state lawmakers, as much as 1,500 jobs could be on the line if the state doesn't take action to legalize gambling at casinos on land throughout the state. Those jobs would be hard to replace, especially since gambling jobs are highly regulated and subject to training, tests, and regular ethical exams. Once those jobs are gone, the worry is that they simply will not return to the state. Casino employees will either have to change careers, suffer from long-term unemployment, or migrate outward to states where casino gambling is on the increase and jobs are frequently added to compensate for revenue and attendance increases.
The Likely Outcome: Legalization of Traditional Casino Gambling in the Hoosier State
Time and time again, states across the country have confronted revenue problems, employment deficits, and competition from nearby states, with the legalization of traditional casino gambling. The view is not so much an endorsement of casino gambling itself as it is a realization that a failure to compete for business will serve only to enrich neighboring states. Lawmakers in both the Democratic and Republican parties in Indiana do anticipate the passage of legislation that will allow for a limited number of traditional casinos to be established in the state by 2015.
That legislation is currently being drafted by the state's two legislative bodies, and it's likely that a vote will occur before June of this year when the legislative process goes on hold and members return home for a summer recess. In most cases, the expectation is that the legislation would allow riverboat casinos to move their operations on land and establish traditional casinos with their existing licenses. A small number of additional licenses would be granted to bring casinos to other areas of the state that do not have quick access to a nearby gambling venue at all.
The hope is that the issuing of new casino licenses, as well as the encouragement of riverboat casinos to become more traditional establishments, will lead to a flourishing of the local gaming industry that will lead to more jobs instead of fewer positions. With added gaming revenue, Indiana would save jobs and confront potential budget shortfalls in the future. It's a scenario that sets the state up for a pretty healthy economic environment as the larger economy continues to recover.
The Lesson Learned: Don't Let Neighboring States Win the Casino Race
The United States' gambling industry is increasingly competitive on a state-by-state basis and, as Indiana lawmakers are discovering, a failure to meet that competition will result in lost jobs and revenue. As the United States moves increasingly toward casino operations in all fifty states, look for more legislatures to legalize casinos and establish a limited number of destinations for residents that will keep them from taking their money elsewhere.