Published: October 20, 2018

Lawmakers move ahead on legal sports gambling, but know lots of questions remain

Lawmakers voted 9-0 Friday to recommend legislation on bringing legal sports betting to Indiana, but the committee chair warned there are "many perils down the pathway before it becomes law."

The almost four-hour session of a legislative study committee included testimony on numerous decisions related to the issue. Those include the level of taxation; who will get licenses to take bets; the types of bets that will be allowed; whether sports leagues will get a cut of the action; and restrictions on who can make bets and how.

Rep. Ben Smaltz, R-Auburn, the committee chair, said he favored a "broad recommendation" to move forward.

"I don't see it as an expansion of gaming anymore than adding a machine to a casino," Smaltz said. "My concern is the regulations, the funding."

But Rep. Timothy Wesco, R-Osceola, said, "I struggle not to see this as an expansion of gambling."

Rep. Jim Lucas, R-Seymour, cautioned against over-regulating the industry.

"This is an issue other states have adopted and made work," Lucas said. "We're not re-inventing the wheel. There's enough data and evidence that we can put something together for Hoosiers."

Eight states have, or will soon have, legal sports gambling — Nevada, Delaware, New Jersey, Mississippi, West Virginia, Pennsylvania, Rhode Island and New York.

A consultant hired by the Indiana Gaming Commission said the state should enact legal sports betting during next year's legislative session.

"On balance, we believe the risks associated with delaying sports betting beyond the 2019 (legislative) session clearly outweigh the rewards," the report said.

The 142-page report, prepared by Eilers & Krejcik Gaming, said the advantages of moving quickly include preventing the "black market" from becoming further entrenched, giving Indiana operators a jump on regional competition and avoiding a protracted debate.

Competing with the "black market" is a consistent theme throughout the report. That's a reference primarily to the illegal, but lucrative, sports gambling operations run online by foreign companies.

The report says the state risks losing business to the black market if it doesn't offer mobile online betting, restricts wagers on college sports or sets taxes too high.

Using a 9.75 percent tax on gross revenue, plus licensing fees for operators, the report estimates Indiana's annual tax revenue from sports gambling at $38 million in the fifth year.

The report said that sports betting operators in Nevada generally keep only 4 to 6 percent of the total handle.

"Sports betting is a low-margin business that appeals to a broad audience," the report said.

https://www.indystar.com/story/news/2018/10/19/legal-sports-gambling-betting-indiana-legislature-study/1659216002/

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