When Gov. Eric Holcomb signed the Indiana sports betting bill into law on May 8, then placed the first legal sports wager at the Indiana Grand Casino in Shelbyville on Sept. 1, he ushered in a new, lucrative era for the Hoosier State.
A report from the Indiana Gaming Commission estimates that online wagering may account for up to 66 percent of the state’s handle within a few years, although that number may be a bit on the low side. New Jersey’s online handle accounts for 85 percent of its wagers and Pennsylvania isn’t far behind.
Indiana has the potential to become one of the largest sports betting markets in the country due to the number of metropolitan areas in states without legal sports betting that surround the Midwestern state.
Penn National Gaming’s Ameristar Casino is located a little more than half an hour from Chicago, the home of numerous professional sports teams, in Illinois, a state that is moving slowly on its sports betting bill.
Betting on college action is legal in Indiana. Kentucky, on the Hoosier State’s southern border, is home to both the University of Kentucky and Louisville, two teams expected to compete for a national football title this year.
Ohio, on Indiana’s eastern border, is also a state that is moving slowly in its bid to capitalize on the nascent U.S. legal sports betting market. The Buckeye State is also home to a number of fan-favorite professional and college sports teams.
Tropicana Evansville, home of William Hill’s 143rd U.S. sportsbook, is situated in southwestern Indiana on the Ohio River near several large metropolitan areas in states that have not yet legalized sports betting, including Nashville, Louisville and St. Louis.
How does Indiana benefit from legal sports betting?
Indiana legislators set the tax rate on adjusted gross sports betting revenue at 9.5 percent, generally considered to be an operator-friendly rate. Only Nevada’s 6.75 percent tax rate is lower. On the other end of the spectrum, Pennsylvania has a tax rate as high as 36 percent and Rhode Island’s is 51 percent.
Operator license fees are also reasonable in Indiana at $100,000, with a $50,000 annual renewal fee. It’s no wonder operators were able to get started right after the legal opening day.
Tax revenue collected will go to the state’s general fund for education, prisons, health care, state parks and more.
In addition, adapted gross receipts are taxed at 9.5 percent and 3.33 percent of that tax income is allocated to the Indiana Addiction Services Fund. Out of that fund, 25 percent will go to treat problem gambling.