Indiana state house

Indiana Senator Files Sports Betting Bill, And Eyes 6.75% Tax Rate

Indiana State Senator Jon Ford (R-District 38) took a second crack at legal sports betting this week, when he filed a bill that would allow state-wide mobile sports betting and sets a six-figure licensing application fee, but does not yet address a tax rate. Ford is one of two Indiana lawmakers who filed sports betting bills in 2018, but both languished in committee.

In the Indiana General Assembly, tax rates are set by the House. Ford told Sports Handle that he and his House counterpart, Representative Alan Morrison (R-District 42) have agreed on a 6.75 percent tax, and should the bill pass the Senate, the rate will be added when the House entertains the bill.

“We want to try to keep the rate low, so we can be competitive and draw in as much of the gray market as we can,” Ford said. “Nevada has been at 6.75 for quite awhile … and that seems to work.”

Among the states that have legalized sports betting in the last year, tax rates have ranged from as low as 9.25 percent for sports betting at brick-and-mortar locations in New Jersey to as high as 51 percent in Rhode Island, where the lottery runs sports betting.

Ford’s current bill, SB 439 has been referred to the Committee on Public Policy, and if made law would allow the Indiana Gaming Commission to begin accepting licensing applications on July 1 and for sports betting to launch on Dec. 1.

The bill also sets a $100,000 application fee, and a $50,000 annual renewal fee. The fiscal analysis projects $1.3 million in revenue to the state in 2020 and $650,000 annually after that. The fees would be put into the “Sports Wagering Fund,” and used to pay for costs “incurred to administer sports wagering.”

Indiana’s gaming tax starts at 15% on a sliding scale

According to the Casino Association of Indiana, the state’s current gaming tax is a sliding scale for land-based casinos, that starts at 15 percent for adjusted gross revenue of $25 million and below and goes up to 4o percent for adjusted gross revenue of $600 million or more. The rate is 22.5 percent for riverboat casinos. Sports betting operators would be enjoying a significantly lower rate.

Ford’s bill allows for sports betting on licensed riverboat and land-based gaming facilities, as well as their satellite venues. The bill also allows for “sports betting through mobile devices,” which is a way of saying mobile and internet sports betting would be legal across the state.

“Legalizing sports betting in Indiana would expand our revenue resources and increase recreational opportunities for Hoosiers,” Ford told the Tribune-Star earlier this week. “Both in-person and mobile sports gambling are predicted to provide Indiana with hundreds of new jobs as well as an additional $150 million in annual state tax revenue over the next five years.”

Indiana looked to be one of the first movers on sports betting last year, but the bill that brought the phrase “integrity fee” into the legal sports betting conversation died in committee. There is no such fee by any name in this bill.

Ford said he expects there to be plenty of discussion when his bill gets a hearing, which should come within a month. In particular, he said he thinks in-person registration vs. remote registration for mobile, the use of official league data, and geofencing around public universities will be key talking points.  The bill currently calls for in-person registration and would allow sportsbooks to use data “selected in its discretion.”

New sports betting bill from Sen. Jon Ford in Indiana. Still reading, but here's one provision the @NBA @MLB won't enjoy. https://t.co/qihiTaeopH pic.twitter.com/TWFkip58jm

— Sports Handle (@sports_handle) January 10, 2019

Betting on college sports would be legal

The bill allows for betting on professional and college sports would be legal, though the clause reads “… and collegiate sporting events approved for sports wagering by the commission” and would allow a sports betting certificate holder can contract with up to three vendors.

Indiana lawmakers have spent considerable time studying sports betting. The Interim Joint Public Policy Committee held hearings in the fall, and the Indiana Gaming Commission signed a two-year deal with a marketing analysis firm to study sports betting.