Indiana Poised To Be The Next State With Legal Online Poker And Casino

Author Image Article By
Last Updated: 
Share On Your Network
Indiana Poised To Be The Next State With Legal Online Poker And Casino
© USA Today
  • Indiana is the nation’s best candidate to legalize online casinos and poker in 2023 and is a potential linchpin to further U.S. online casino expansion. 
  • The state has explored online gambling multiple times in recent years, but the stars never adequately aligned for the Hoosier State … until now? 

If you read the tea leaves, all signs point to Indiana becoming the seventh state to legalize online casinos next year. Indiana online casinos would be a solid market. 

With 6.7 million residents, Spectrum Gaming estimated the state’s online casino revenue potential at $564 million in Year 1 and $824 million in Year 3. More importantly, Spectrum concluded the revenue would be additive, “Based on results from the six iGaming states, Spectrum does not expect iGaming to negatively impact Indiana casino revenues.”

A Vixio Gambling Compliance study produced for Light & Wonder estimates the Indiana online gambling market at $724 million at maturity, with a tax revenue potential of nearly $150 million.  

The Case for Gambling Legislation Expansion

Indiana will skip the usual gambling expansion talking point of tax revenue. Tax revenue will always be a significant issue, but the state is in good shape financially, with a $6 billion budget surplus. Instead of tax revenue, the case for legalizing online casino gambling in Indiana will likely center on modernizing and bolstering the state’s existing casino industry and providing robust consumer protections.

Focusing on supporting the existing gambling industry and consumer protections rather than squeezing the industry for tax proceeds will eliminate the usual quibbles over licensing fees and tax rates. It will also help ease the burdens of stricter responsible gambling policies, which may be necessary to get an online gambling bill across the finish line in a conservative state.

The Elephant Has Left the Room 

If not for a completely unrelated issue, there is a good chance Indiana would have legalized online gambling last year. That issue was an investigation into illegal campaign contributions that concluded earlier this year with jail sentences.

The investigation made gambling expansions a toxic issue in the state last year, with lawmakers concerned about the optics of expanded gambling discussions while a corruption case centered on gambling played out.

The investigation may be over, but there will likely be some residual effects, as scandals tend to linger long past their expiration date. Consider the 1978-1979 Boston College points shaving scandal that was brought up during Massachusetts sports betting discussion this year. 

Also not helping matters is a pay-for-play scandal connected to sports betting in neighboring Ohio. 

The Ohio scandal could keep the events in Indiana’s recent past top of mind and provide naysayers with some ammunition. Still, the general belief is the issue is unlikely to derail legal online casino talks in 2023.  

Champion Receives Key Committee Chair

Rep. Ethan Manning is expected to lead the online casino charge in the Indiana House. Manning was selected to chair the Public Policy Committee last week, a crucial committee assignment that will be the likely starting point for gambling legislation.   

Manning replaces Rep. Ben Smaltz, who was lukewarm to the idea of online casino legalization. 

With Manning’s appointment, there are no visible roadblocks in key committees (Public Policy and Appropriations) or leadership in either chamber.

A Couple of Unresolved Questions

Online casino legalization won’t be entirely smooth sailing.

First, never underestimate the anti-gambling crowd, which has a strong base in Indiana, a religious state with republican supermajorities in both chambers and control of every key statewide office.

Beyond that, several issues might bubble to the surface during Indiana online casino discussions.

Will Online Lottery Join the Party?

Indiana already has mobile sports betting, so if the state legalizes online casino gambling and online poker, the Lottery might feel left out in the cold and could make a fuss about being left on the sideline. 

So don’t be surprised if Indiana rolls iLottery into its online gambling bill. That would eliminate any tension between the Lottery and potential online gambling stakeholders and boost the amount of revenue the measure can raise, as lottery proceeds go to the Indiana State Teachers’ Retirement Fund, the Pension Relief Fund, and the Build Indiana Fund.

The inclusion of iLottery could create a new friction point if lottery retailers oppose the effort. That opposition stems from cannibalization fears, even though there is no evidence that the introduction of online lottery harms brick-and-mortar revenues. 

As Rob Wesley, the director of digital at the Virginia Lottery, told Jeffries University in April 2022[i]:

“As iLottery started to get more and more discussions in the US industry, the biggest roadblock to overcome, the biggest opposition to that, was retail. To your point, they said, “This is going to hurt our business.” At the time, the … only data we had was European data. We said, “Here’s what the European data says. The European data says when iLottery launches, the brick-and-mortar retail business, not only does it not get impacted negatively, it actually increases at a greater rate post-iLottery launch.

“Each lottery that has subsequently launched since has experienced the same thing. The retail lottery growth rate after iLottery has been introduced has actually accelerated. It’s increased at a rate greater than it was prior to iLottery being there. We have not seen a single case of the retail lottery business being negatively impacted by a lottery launching online.”

Michigan, an online lottery state since 2014, has set annual sales records every year since the introduction of online lottery products, with retail sales increasing during that time.

Will Horse Racing Have a Say?

If iLottery is considered, every gambling stakeholder will have a seat at the table. Well, almost every gambling stakeholder. Horse racing won’t be involved in running online casinos (of note, two Indiana casino properties possess racetracks, Indiana Downs and Indiana Grand), but the industry could seek subsidies from the bill. 

If the horse racing industry does make enough waves to threaten the bill, those subsidies would likely be a small stipend of total revenue going to a horseracing fund. The bottom line, online gambling in Indiana could require a handout to placate the horse racing industry. 

Will VGTs Make an Appearance if the Bill Becomes Omnibus?

Anytime gambling expansions are discussed in a Midwest state, the topic of VGTs is likely to rear its head. VLTs sunk sports betting in Missouri this year, and a little further in the past, VGTs were a precarious issue that delayed the passage of Pennsylvania’s gambling expansion bill by a year. 

Adding VGTs to Indiana bars and restaurants has been discussed in recent years. Keeping it separate from online gambling will be challenging, particularly if iLottery turns the bill into a larger gambling expansion package. 

That said, VGTs could be a compromise point for lottery retailers that oppose online lottery. 


[i] Jeffries U: An Inside Look at Success of VA iLottery, April 21, 2022

Author Image Article By
Last Updated: 
Facebook Icon Twitter Icon Linkedin Icon Email Icon Copy Link Icon