LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington, Suite 301
Indianapolis, IN 46204
(317) 233-0696
iga.in.gov
FISCAL IMPACT STATEMENT
LS 7162 NOTE PREPARED: Jan 14, 2022
BILL NUMBER: SB 391 BILL AMENDED:
SUBJECT: Gaming Revenue Distribution.
FIRST AUTHOR: Sen. Perfect BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED: X GENERAL IMPACT: State & Local
XDEDICATED
FEDERAL
Summary of Legislation: The bill establishes the Gaming Revenue Fund. It provides that tax revenue
collected after July 1, 2022, from the imposition of the Wagering Tax, the Supplemental Wagering Tax, the
Graduated Slot Machine Wagering Tax, the County Gambling Game Wagering Fee, the Sports Wagering
Tax, and taxes and fees imposed on pari-mutuel wagering are deposited in the Gaming Revenue Fund. The
bill provides that the Treasurer of State administers the Gaming Revenue Fund. It provides for distribution
of the money in the fund.
It provides that if the Indiana Gaming Commission (IGC) imposes civil penalties in an amount that exceeds
120% of the average amount of penalties or fines imposed for violations of gaming requirements by state
gaming oversight regulating bodies nationwide, the amount that exceeds 120% is deposited in the State
General Fund. It requires the IGC to conduct a review of administrative rules.
It makes corresponding changes.
Effective Date: July 1, 2022.
Explanation of State Expenditures: Auditor of State: The Auditor of State will have to make changes in
the distribution schedule for certain gaming taxes and fees. The Auditor of State would be able to accomplish
the adoption of these distribution changes within the normal course of business.
Indiana Gaming Commission (IGC): The bill requires the IGC to conduct a review of all administrative rules
promulgated by the IGC including emergency rules. The review must be conducted by October 1, 2022.
It requires the IGC to provide a copy of the determinations made under the review to the General Assembly
SB 391 1 in an electronic format. This and other provisions in the bill will result in increasing workload for the IGC.
The change in methodology of distributions would increase the available funds to the IGC.
Hold-Harmless Distributions: Current law allows up to $48 M to be distributed as supplemental (hold-
harmless) distributions to state and local entities that receive supplemental wagering tax revenues. The bill
removes the cap on this distribution. Since the bill removes the current distributions under the Supplemental
Wagering Tax, the hold harmless distribution required under the provision will increase from $48 M to $98.4
M starting in FY 2024. It will not impact the distributions in FY 2023. The hold harmless distributions are
made from the Riverboat Wagering Tax money deposited in the State General Fund.
Explanation of State Revenues: The bill changes the distributions of certain gaming taxes. The bill will not
affect any revenues generated from these state or local taxes. It removes the distributions under current law
for these gaming taxes. It requires that the revenues from these gaming taxes be deposited in the Gaming
Revenue Fund established by the bill. It provides for a distribution schedule from the Gaming Revenue Fund.
It requires that the money deposited in the fund be distributed as follows:
(1) 0.57% to the Indiana Gaming Commission.
(2) 60.2% to the State General Fund.
(3) 5.9% to the General Assembly for appropriations.
(4) 6.23% between each county based on county’s population.
(5) 27.1% between each host unit. It defines host unit as local units with casinos.
The following table shows the impact on state funds and entities receiving gaming taxes in FY 2023. The
impact will continue in future years.
Impact of Change to the Distributions - FY 2023 ($ in Millions)
State Funds Receiving the Distributions
Under
Current Law
Under The
Bill
Difference
Indiana Gaming Commission $3.50 $4.08 $0.58
State General Fund 479.11 432.31 (46.80)
General Assembly for Appropriations 0.00 42.37 42.37
Addiction Services Fund 1.03 0.00 (1.03)
Gaming Integrity Fund 0.15 0.00 (0.15)
Indiana Economic Development Corporation 1.79 0.00 (1.79)
West Baden Springs Preservation Fund 2.96 0.00 (2.96)
IHRC Operating Fund 3.14 0.00 (3.14)
Livestock Ind Promotion and Development Fund 0.10 0.00 (0.10)
Mental Health Fund 1.57 0.00 (1.57)
State Fair Commission 2.45 0.00 (2.45)
Veterinary School Research Account 0.15 0.00 (0.15)
Racino Set Aside AGR for Horse Racing Purposes 58.96 0.00 (58.96)
State Funds and Agency Total $554.91 $478.76 ($76.15)
Additional Information- The bill changes the distributions of the following gaming taxes and fees:
Pari-Mutuel Wagering Tax: The tax is paid on pari-mutuel wagers made on live and simulcast races. It is
paid by racetrack permit holders and licensee’s of satellite facilities. The rate equals 2% of the total amount
SB 391 2 wagered on live races and simulcasts conducted at a permit holder’s racetrack and 2.5% of the total amount
wagered on simulcasts at satellite facilities. The first $150,000 is deposited in the Veterinary School
Research Account with the remainder deposited in the Indiana Horse Racing Commission Operating Fund.
The revenue from the tax is estimated to be about $1.3 M in FY 2023.
Pari-Mutuel Satellite Facility Tax: The tax is paid on pari-mutuel wagers made at a satellite facility by an
entity that is licensed to operate the satellite facility. The rate is equal to 0.5% of the total amount wagered.
Fifty percent of the revenue is deposited in the Livestock Industry Promotion and Development Fund with
the remaining distributed to the State Fair Commission. The tax is estimated to generate about $0.2 M in FY
2023.
Racetrack Fees: The bill moves the fees paid by racetracks and deposited in the Gaming Integrity Fund and
Indiana Horse Racing Commission Operating Fund to the Gaming Revenue Fund created in the bill.
Riverboat Supplemental Wagering Tax: Riverboats, except the French Lick casino, pay the Supplemental
Wagering Tax. The tax is based on a calculated rate not to exceed 3.5% of the AGR. The revenue is
distributed to the State General Fund, dedicated funds, and local units. The tax is estimated to generate $46.9
M in FY 2023. Additionally, the Vigo County casino could generate about $2.9 M to be distributed to local
units in Vigo County.
Supplemental Wagering Tax Hold-harmless Distributions: The recipients of the Supplemental Wagering Tax
are also provided with a supplemental distribution to make up for any loss below the FY 2002 distributions.
The supplemental hold harmless distribution is capped at $48 M. The bill removes the Supplemental
Wagering Tax distribution and removes the cap on the hold-harmless distributions. This will lead to
additional distributions from the State General Fund to the State Fair Commission and the Mental Health
Fund. [The additional distribution is not reflected in the table showing the impact from changing the
distributions.]
Riverboat Wagering Tax: All riverboats pay this tax which is based on a graduated tax rate applied to the
AGR. After the IGC receives the cost of administration, then the first $33 M is set aside for revenue sharing
distributed on a per capita basis to local units in counties that do not contain a riverboat casino. After the
revenue sharing set aside, 25% of the remainder up to the FY 2002 distribution level is distributed to the
local units with riverboats. The remaining Riverboat Wagering Tax revenue is distributed to the State
General Fund. The tax is estimated to generate about $437.7 M in FY 2023.
Slot Machine Wagering Tax: Racinos pay this tax which is based on a graduated tax rate applied to 88% of
the AGR. The revenue is distributed to the State General Fund. The tax is estimated to generate about $123.6
M in FY 2023.
Set Aside Racino AGR for Horse Racing Industry: Current law authorizes horse racing associations and
racino licensees to negotiate an amount of the slot machine receipts to be used to support the horse racing
industry. It provides that the agreement must require between 10% and 12% of the licensee's AGR. The set
aside AGR is distributed to state dedicated funds and for horse racing purposes. The revenue generated by
this provision is about $59 M annually.
Sports Wagering Tax: All riverboats and racinos are allowed to conduct sports wagering. A tax rate of 9.5%
is applied on the AGR received from sports wagering. The revenue is deposited in the state General Fund.
Of that revenue, 3.33% is transferred to the Addiction Services Fund. The tax is estimated to generate about
SB 391 3 $31 M in FY 2023.
Gaming Penalties: The bill requires that if IGC imposes civil penalties above a threshold set in the bill, any
additional money would be deposited in the State General Fund. This provision could decrease penalty
revenue deposited in the State Gaming Fund.
Explanation of Local Expenditures:
Explanation of Local Revenues: The bill removes direct distribution of certain gaming taxes to the local
units. It deposits these gaming taxes into the Gaming Revenue Fund and distributes a portion of the
collections to the local units. The total fiscal impact from these changes to local units is shown in the
following table.
Impact of Changes to the Distributions - FY 2023 ($ in Millions)
Local Units Receiving the Distributions
Under
Current Law
Under The BillDifference
Revenue Sharing with Non-Riverboat Counties $32.40 $38.01 $5.61
Revenue Sharing with Riverboat Counties 0.00 6.75 6.75
Host Cities (Cities with Riverboats and Racinos) 130.82 194.61 63.79
Local Total $163.22 $239.37 $76.15
Additional information- Local distributions from the following taxes are impacted under the bill:
Supplemental Wagering Tax: The following local units receive distributions from the Supplemental
Wagering Tax: (1) dock city, (2) dock county, (3) county convention and visitors’ bureau.
Supplemental Wagering Tax Hold-harmless Distributions: Local units that receive Supplemental Wagering
Tax, also receive a hold harmless distribution capped at a level under current law. The bill removes the
Supplemental Wagering Tax and removes the cap on the hold-harmless distributions. This will lead to
additional distributions from the State General Fund to the local units receiving this distribution. [The
additional distribution is not reflected in the impact.]
Riverboat Wagering Tax: Local units receive the following distributions from the Riverboat Wagering Tax:
(1) non-riverboat counties receive revenue sharing, (2) host counties receiving 25% of the revenues
remaining after the IGC cost of administration and revenue sharing amount.
County Slot Machine Wagering Fees: Racinos pay a fee equal to 3% of AGR up to $8 M annually to the
county where they are located.
Hold-harmless from Gary Casino Relocation: Current law provides a Riverboat Wagering Tax distribution
to offset the reduction in Wagering Tax distributions to the city of East Chicago, Hammond, and Michigan
City after the Gary riverboat relocates to an inland facility. The hold-harmless distribution applies for the
first full four years after the relocation of a Gary riverboat. The bill removes the hold-harmless distribution
to these units. This could result in a decrease in revenue to the city of East Chicago and Michigan City and
an increase to the city of Gary. Any fiscal impact will begin in FY 2023.
Pari-Mutuel Simulcast Fees: The fee is imposed at a graduated rate and distributed to the county where the
SB 391 4 race track is located.
State Agencies Affected: Auditor of State; Indiana Department of Revenue; Indiana Gaming Commission;
Indiana Horse Racing Commission; Mental Health Division; State Fair Commission; Indiana Economic
Development Corporation.
Local Agencies Affected: All local units.
Information Sources: LSA Handbook of Taxes, Revenues, and Appropriations,
https://iga.in.gov/legislative/2022/publications/handbooks/ ; Indiana Horse Racing Commission, Annual
Report, https://www.in.gov/hrc/files/2020_IHRC_Annual_Report_1_6_22.pdf ; Indiana Gaming
Commission, Annual Report, https://www.in.gov/igc/publications/annual-reports/.
Fiscal Analyst: Randhir Jha, 317-232-9556.
SB 391 5