Indiana Rep. Ethan Manning announced he will propose legal online casinos as part of an omnibus gambling expansion bill when the 2025 legislative session begins on January 21. The bill, HB1432, would permit Indiana retail gambling operators to grant market access for online partners, as well as establishing an online lottery for the Hoosier state, among other adjustments to the gambling laws.
Each of Indiana’s casinos and racetracks would be allowed to receive an online casino license and offer iGaming, including slots and table games. The license costs $500,000 and grants up to three skins.
Per the bill, The Indiana Gaming Commission would become the regulatory body for online casinos. The commission oversees all casino, racino and sports wagering activities in the Hoosier State.
The bill would also establish the Indiana Responsible Gaming and Problem Gambling Services Program fund and provide for uses of money in the fund.
Above-average proposed tax rate
HB1432 proposes a 26% tax rate for Indiana online casinos in their first year and a sliding tax rate of 22% to 30% thereafter, depending on operators’ adjusted gross receipts (AGR).
Manning’s bill includes a tax rate in alignment with recent recommendations from the National Council of Legislators from Gambling States (NCLGS), if not slightly higher. NCLGS President and West Virginia delegate Shaun Fluharty suggested a 15% and 25% tax rate for prospective states.
The current nationwide average is 19%, based on seven states with legal iGaming:
- Rhode Island: 61% on slots, 15% on table games
- Delaware: 57% on slots, 15.5% on table games (plus a 4.5% purse supplement)
- Pennsylvania: 54% on slots, 16% on table games
- Michigan: 20% to 28%, depending on AGR
- Connecticut: 18% (20% after five years of operation)
- West Virginia: 15%
- New Jersey: 15%
A new nine-figure revenue source
Indiana has benefitted from its casino industry since the mid-1990s, taking advantage of more restrictive gambling laws across state lines from metropolitan areas such as Chicago, Louisville and Cincinnati. Its 13 casinos generated $2.4 billion in revenue in Fiscal Year 2024 and contributed $655.2 million in taxes.
Online casinos present an opportunity for the state to generate hundreds of millions more in annual tax revenue. Given Indiana’s population, its iGaming industry would likely surpass $2 billion in its first three years, generating more than a half-billion dollars in taxes.
Other states with iGaming saw it account for between 68% and 83% of their 2024 online gambling revenue totals.
- Michigan: $2.43 billion (83.1%)
- West Virginia: $250 million (83%)
- Pennsylvania: $2.69 billion (77.6%)
- Connecticut: $549 million (70.3%)
- New Jersey: $2.37 billion (68.1%)
The fourth try in five years
Indiana’s first three attempts to legalize iGaming came between 2021 and 2023. Each year resulted in a lack of progress, culminating with 2023’s bill failing to advance beyond a House committee.
Manning and Sen. Jon Ford worked on 2023’s House Bill, which fell victim to fiscal note poisoning that rendered it helpless. The Indiana Legislative Services Agency produced a statement based on flawed 2011 data claiming that online casinos would cannibalize their brick-and-mortar counterparts by upwards of 30%.
The failures led to a new plan of attack in 2024, with Manning set on introducing a newer and more modern piece of legislation. However, those efforts were thwarted in late 2023 when former Rep. Sean Eberhart pled guilty to gambling-related corruption charges, causing lawmakers to rule out all gambling expansion bills for the following year.
With 2024 firmly in the past, Manning’s new efforts will focus on a wide-reaching expansion that includes online slots, table games and lottery sales. The bill also expands the pull tab industry at type II gaming establishments, such as taverns and jumbo boats.
Indiana online casinos could launch on September 1
For HB1432 to pass and become law, it must gain majority support in both houses and be signed into law by Gov. Mike Braun.
Braun was elected as the Governor of Indiana last November and took office on January 13. He expressed an openness to online gambling expansion during his 2024 campaign.
If HB1432 passes, the law would take effect on July 1, paving the way for the state’s first legal online casinos to launch as soon as September 1.
Its first House committee reading will occur on January 21.