Pence and his team need to start looking at alternatives.
Hey, suckers, you’ve been falling down on the job. Wagering on horse races in Indiana has fallen steadily since 2005. It fell to $125 million in 2011, the lowest level since 1995.
But not to worry. Centaur Holdings, which owns Hoosier Park in Anderson and is in the process of acquiring the Indiana Grand Casino and Downs in Shelbyville, has plans for the two racinos that it hopes will separate Hoosiers from a lot more of their betting money. Each facility will have its own kind of racing. Anderson will have the harness racing, and all the thoroughbred racing will go to Shelbyville. Such specialization, it is hoped, will attract more bettors.
Centaur also plans improvements at both casinos and racetracks, including a 1,500-person music venue in Anderson and an entertainment complex and additional slot machines in Shelbyville.
Even if the specialization works exactly as planned, however, it’s likely to bring only a temporary boost for a segment of the economy that will continue to be under great economic stress.
The two racinos and the state’s 11 riverboat casinos will see their revenue eroding as more and more competition from other states siphons off Indiana’s gambling money. Current projections say there will be a 9 percent drop in gambling tax revenue in 2013 and even more in subsequent years.
And that’s a drop the state really can’t afford. Gambling income is unpredictable – and, it turns out, not as recession-proof as some might have hoped – so the state should have used it for one-time-only projects. Instead, tax revenue from gaming was used for ordinary budgeting. Casino taxes are now the third-largest source of revenue for the state.
Gov. Mike Pence and his economic team are going to have to make some tough choices. If they want spending to stay about the same or even increase a little, they’ll need to find a new source of revenue or increase revenue from some existing taxes. If they don’t want to do that, they’ll have to become even bigger penny-pinchers than Pence has already indicated they will be.
There will be a great temptation – and probably more than a little pressure applied – to follow the racinos’ lead and figure out a way to get more gambling dollars out of Hoosiers, by letting casinos move to dry land, for example, or giving them tax incentives. We hope the state resists such urges.
It’s a sordid business, having to depend on encouraging the moral weaknesses of citizens to fund the government. Let’s not exploit Hoosiers any more than they already have been.