Lucky Seven: Could Indiana become the seventh state to legalise online casinos?

January 13, 2023 Indiana State Flag - Casino Genie

While sports betting has taken off in a big way across the USA, with more than half of the states in the union now having legalized this form of wagering, online casino betting has lagged behind. As of this moment, the number of states that allow online roulette and slots is pretty tiny by comparison; six jurisdictions have passed such laws while 33 have permitted sports betting.

Given the differences between casino betting and sports wagering – the former is considered to be more random and less informed than the latter – most states that pass sports betting laws choose not to add casino wagering to the docket. However, Representative Ethan Manning is hoping that Indiana will be the lucky number seven, and is aiming to bring forward legislation to make the state the latest one to accept online casino betting.

Casino betting online is already permitted in Connecticut, Delaware, Michigan, New Jersey, Pennsylvania and West Virginia. All of those states also allow sports betting, and most passed the legislation permitting these two forms of betting at the same time. Indiana would be relatively unique in adding casino gaming after the fact. And that eventuality itself could be a long way off, too, as Rep Manning has some significant obstacles to clear in his bid to bring online casinos to the Hoosier State.

One such obstacle is the question of where the tax rate would be set on casino betting. Manning has indicated that he would expect to set it at 18-19%, but this has resulted in widespread disagreement. That would represent a much lower tax on earnings than it currently paid by brick-and-mortar casinos in the state. With online casinos already having much lower overheads, this would extend a major competitive advantage to online casinos and could threaten the survival of their brick-and-mortar twins. Given that in-person casino betting creates jobs and a boost to adjacent businesses, such legislation may be unpopular. A bill which set the taxation level closer to 40% might get more support.

It could become more unpopular still if Manning clings to the decision to make less than 4% of revenue available to combat problem gambling, an issue that many lawmakers feel would rise considerably with the introduction of online casino gaming.

As of now, details of any potential bill are quite limited, with Manning himself stating that he would like to consult extensively with other elected officials before writing the legislation in its entirety. Time will tell whether the representative will build enough consensus through these meetings to pass online casino legislation in Indiana, but it’s enough of a conversation-starter that he’s even talking about it given the numbers.

While there are multiple states lining up behind the existing sports betting markets, the number who might pass online casino legislation is much lower as of now. Draft legislation before congress in North Dakota might make it a more likely seventh state than Indiana, but this remains to be seen as of the beginning of 2023.

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