INDIANAPOLIS — When a glittering $350 million casino opens next month in a former department store in downtown Cleveland, Ohioans who plan never to play the slots may still feel like they've hit the jackpot.

Project developers say Ohio's first casino, combined with three more casinos soon to open in the Buckeye state, will generate 7,500 permanent jobs, 9,700 temporary construction jobs, and $600 million annually in tax revenues statewide.

Every Ohio county will get a slice of the gaming tax revenues, and some will get a bigger boost: In Columbus, a new casino is going up on the site of an abandoned auto-parts plant; the Cleveland casino is resurrecting a treasured historic site — the long-shuttered Higbee department store where scenes from the movie “A Christmas Story” were shot.

But Ohio’s windfall spells trouble for Indiana.

State fiscal analysts predict the arrival of casinos in Ohio will cut deeply into the competition for gambling dollars and the billion-dollar tax revenue stream that helps fund essential public services in Indiana.

The Casino Association of Indiana predicts a $200 million to $300 million annual loss in gross gaming revenues at state’s 13 casinos. State budget analysts, meanwhile, predict a $100 million annual loss in gaming tax revenues.

“It’s going to be a huge hit,” said state Sen. Luke Kenley (R-Noblesville), chairman of the Senate Appropriations Committee. “There’s no way to make up those kind of losses.”

Kenley has already seen a glimpse of the future: Indiana’s gaming revenues have fallen for the past two years. In 2011, admissions to the state’s casinos fell to their lowest level since 1997.

You can blame it on other states honing in on Indiana’s action.

Nineteen years ago, Indiana became the sixth state in the nation to legalize riverboat gambling. Legislators cleared the way for the revenue stream that would come: The taxes the state slapped on the casinos generate more than $800 million a year; combined with the state’s lottery, charity gaming, and the pull tabs and punch boards in bars and taverns, gambling generates about $1 billion annually in tax revenues for the state.

There are now 22 states in the gambling game, and about half have entered since 2008 when the recession hit state coffers. Like Indiana, they went in search of a sure-fire revenue stream. According to a new report from the American Gaming Association, there are now 1,020 casinos across the U.S. That doesn’t count the ones coming on line in Ohio.

Mike Smith, executive director of the Casino Association of Indiana, has been warning lawmakers for several years that the numbers were going down. The market for gambling dollars, Smith said, is “more and more saturated.”

“Making sure we stay competitive is the big thing,” Smith said of Indiana’s casinos. He’s hoping legislators will consider easing up a little on their dependence on gaming tax revenues.

Currently, Indiana’s 11 riverboat casinos are taxed up to 40 percent on gross gambling revenues; two casinos located at the state’s horse race tracks, the so-called racinos, pay up to 35 percent of gross gaming revenues. There are also admission taxes at the casinos, and local revenue-sharing agreements with casino host counties that push the total taxes higher.

Last year, Indiana was the No. 2 state in the nation for gaming tax revenues. What Smith doesn’t want to see is the state raise the casino taxes even more.

“That would just kill us,” Smith said. “We’re already one of the highest taxing states in the nation on gaming.”
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