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3/11/2017 12:48:00 PM
Illinois gambling bill could further saturate Tri-State area market

Kaitlin L. Lange, Evansville Courier & Press

Less than a month after Indiana lawmakers shot down a proposal for a new casino in Terre Haute, Illinois is looking into adding its own casinos — including one just an hour-and-a half west of Evansville.

Additional casinos in Illinois could put more strain on the already saturated Midwest casino market.

John Chaszar, general manager of Tropicana Evansville, wouldn’t disclose how much of the company’s current patrons are from Illinois, but said a new casino would impact them if it’s within the area many of their guests come from.

He said nearby Harrah’s Metropolis, an hour south of the proposed Williamson location and a bit more than two hours from Tropicana Evansville, is already a source of competition.

The Williamson location would be closer. But gaming expert Ed Feigenbaum said he doesn’t think it will have a huge impact on Tropicana’s operations, because the area is not likely to attract a big company.

“You have to really make an effort to get (to Williamson County),” Feigenbaum said. “It’s not something that’s on the way from another major market area, like Nashville or St. Louis.”

Though not certain to pass, the proposal is the latest in neighboring states’ attempts to utilize casino money, further threatening revenue in Indiana.

The measure was passed by the Illinois Senate as part of a “grand-bargain” state budget plan. The casino plan cannot move forward unless it’s accompanied by other bills that have yet to be approved. So the fate of the new casinos is largely in the air.

Chicago and in Danville, an hour north of Terre Haute, which could impact casinos elsewhere in Indiana.

Casino revenue has already been on the decline in Indiana, due to less interest from the younger population and steadily increasing competition from neighboring states.

In 2016, gross gaming revenue in the state was almost 21 percent below its peak in 2009, according to a market assessment from Spectrum Gaming Group.

The casinos on the southeast side of the state serve as a warning to what increased out-of-state competition can do to the industry. The revenues of Belterra, Rising Star and Hollywood Casino took a hit in 2013 with the opening of the Cincinnati casino.

Hollywood Casino, at one time the largest casino revenue source in the state, is down to a third of the revenue they brought in Feb. 2012.

Chaszar likened what happened there to what could happen to Evansville’s casino with increased competition from either southeastern Illinois or Kentucky.

And it isn’t just something only casino operators should be worried about, he said.

A decrease in revenue to casinos could be felt in state and city governments, many of which have come to depend on the extra revenue. In 2016, state and local entities collected $604.6 billion, according to the Indiana Gaming Commission’s yearly report.

In Evansville, that money is used for capital projects, such as purchasing police cars or fire trucks.

Earlier in the legislative session Mayor Lloyd Winnecke emphasized how important that casino money is for the city.

“Gaming money is extraordinarily important for the city of Evansville,” Winnecke said. “Because we have gaming money, it relieves pressure from the general fund and other revenue streams. … Without it, it would be really, really challenging.”

Evansville earned about $13 million in 2016 from casino taxes. While wagering and admission taxes have decreased over the years, Tropicana is paying much more for their land lease as they expand. Therefore the city has remained unharmed by a decline in the state’s casino revenue.

The casino’s market has also been largely left untouched so far, as opposed to much of the rest of Indiana. Feigenbaum also said Tropicana has made the right decision by expanding.

Chaszar said the increased competition is why Indiana needs to reevaluate how it handles the gambling industry. House Bill 1350 in the Indiana General Assembly would adjust how taxes are collected, easing the burden on casinos and pushing them to invest in more leisure activities directly next to the gaming floor.

“Obviously neighboring competition, it will hurt state and local revenues as well as the casino revenues,” Chaszar said. “It will hurt job growth, but it’s inevitable. …We really probably need to get in front of it before it happens again.”

The Associated Press contributed to this story.

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