Implications of Indiana's First Tribal Casino

Indiana introduced casino gambling in the mid-1990s, and currently the midwestern state has 13 licensed casinos that each year contribute valuable funds towards local government coffers. In 2009, revenues then peaked at $900 million, but have since declined mostly due to increased competition from nearby states such as Ohio, Illinois, Michigan and Kentucky.
Nevertheless, the Indiana’s casino industry could be in store for yet another blow, possibly to the tune of $800 million over a five-year period, after the state’s first ever tribal casino opens for business in early 2018. The Pokagon Band of Potawatomi Indians already run three casinos in southwest Michigan, with its new Four Winds Casino to be based in northern Indiana.
As well as a casino featuring 1,800 slot machines, Four Winds Casino will also offer a 500-room hotel, four restaurants, three bars, a cafe, and retail outlets. Unlike Indiana’s other casinos, the tribal run operation will also benefit from not having to pay the 35% state taxes required of its other gambling establishments.
Needless to say, Indiana’s other operations are already counting their potential costs, especially with the extra marketing advantages and bigger jackpots the new casino will be able to offer, and as Matt Bell, head of the Gaming Association of Indiana commented recently:
“The introduction of tribal gaming in South Bend will be the single most disruptive occurrence to the casino gaming industry since properties opened their doors 20 years ago.”
In addition to a hit to casino revenues, a Spectrum Gaming Group report has estimated that the state will also lose around $354 million in potential taxes over the same five-year period. However, there is little that the state can do as according to the Indian Gaming Act, tribes can run class II casino without first seeking out state approval. Highlighting the need to move with the times, Matt Bell from the Casino Association of Indiana called for a review of the industry, stating:
“I think it’s important for legislators to take a comprehensive look at the industry and the challenges it faces today, and create a vision for the future that we can mold policy around.”