Indiana Gaming - How the Lottery is the Worst Bet

It amuses me how much hand wringing Indiana legislators can do about the evils of casino gaming, when the government-run lottery is the worst bet offered by legal gaming in the state.

All it takes to see the disparity is to review the 2012 annual reports of the State Lottery Commission of Indiana and the Indiana Gaming Commission.

Combining both the scratch off tickets and lottery drawings, 62% of the money wagered was returned by the Lottery to players in the form of wins.

Compare that to 80% of table game wagers and 91% of electronic game wagers returned by Indiana's casinos to players.

The State got $205 million in "distributions" from the Lottery and $809 million in taxes from the Casinos.

There is much consternation in many quarters lately is about the Gtech ads for the Lottery that emphasize the hope of winning despite the high probability of losing.  Meanwhile, the Legislature is looking to reverse the erosion of Casino-paid taxes by dinging the local government's take and easing up on the taxation of free play awarded by casinos to their players and the requirement of being boat-based.  Governor Pence has indicated that he is deeply troubled about any changes at all.

The sin quotient for gaming is quite high in this state, as are the taxes paid.  In any other industry, Indiana's legislators would be all about cutting those tax rates in order to encourage investment by the industry.  They also would not block expansion.

The Indiana Gaming Commission annual report has an interesting look at gaming in other states - the 'competition'.  Only Illinois and Pennsylvania have higher tax rates for gaming - while Pennsylvania has no admissions tax on top of the gaming tax.  The emerging gaming competition from Ohio, where the tax is considered onerous at 33%, will bring pressure on the Ohio River casinos in Indiana, where the gaming tax is upwards of 40% in addition to the $3-4 per person admissions tax.

As of the 2012 annual report, no admissions numbers were available for Pennsylvania.  Given that caveat, of the 8 other states Indiana competes with, 4 had higher admissions numbers and 4 had more floor space than Indiana casinos.  Only two, including the mighty Nevada, had higher taxes paid.

Indiana's casinos (excluding nearby Indiana Grand and Hoosier Park who don't report those numbers) had nearly 25 million admissions in 2012.  Some of those sinners are probably Hoosiers, who in 2010 numbered 6.5 million.

I'm not going to hold my breath for the State of Indiana to treat gaming like any other industry and create conditions that are ripe for jobs growth.  But, I do have to at least laugh at the State, when it appears to be comfortable with simultaneously gouging the sinners who buy the State's product while wringing its hands about the sinners who buy the casinos' product.