LEGALIZE, TAX AND REGULATE ELECTRONIC GAMING DEVICES 

Key Points: 

Action to legalize stand-alone EGDs would have important benefits to the citizens of Indiana. It would recognize the reality that such activity already takes place in many venues across the state. It would bring it under regulatory control to ensure that the machines are operated appropriately and fairly, and assess taxes that would help to meet the current fiscal challenges of state and local governments. An EGD gaming tax can be an important source of revenue for the state, and the legislature should give it serious consideration. 

·         Legalization, taxation, and regulation of stand-alone electronic gaming devices (EGDs) present a new revenue source for the state as well as for local units of government, many of which are in financial straits similar to the state.

·         Adjusted gross revenues from EGD play at riverboat casinos in Indiana continue to show comfortable growth, despite ongoing competition from the existing, untaxed, stand-alone EGDs that have operated for many years in Indiana. (See Charts 1 and 2.)

·         The National Gambling Impact Study Commission (NGISC) reported in 1999 that legalized, stand-alone EGDs were in operation in six states.

The legislation proposed would: 

·         Allow holders of permits for on-premise consumption of alcoholic beverages to operate EGDs on the licensed premises. 

·         Establish an appropriate rate of taxation that ensures a positive revenue stream to the state. 

·         Use existing state commission as the cognizant body to monitor compliance and enforcement of gaming laws and regulations for EGD operation. 

·         Establish a maximum number of EGDs that may be operated on the premises of a license holder. 

·         Prohibit EGDs play by minors. 

·         Require that EGDs be out of sight of minors. 

·         Require that off-site EGD operations be connected to a central communications system to ensure proper monitoring and to compute and bill taxes due. 

·         Thousands of Hoosier businesses, most of them small and locally owned and operated, would benefit from the additional revenues that would be generated by stand-alone EGD gaming.

PARITY WITH PRIVATE CLUBS ON PULL TABS 

Key Points: 

• We are small locally owned responsible businesses that employ people and pay taxes. 

• Small locally owned businesses are at a competitive disadvantage when pull-tabs are only legalized in private clubs.

• The existence of many small locally owned businesses is being threatened by this unfair competition.  This is happening as “private clubs” are increasingly opening memberships to the general public.

• Making pull-tabs legal in licensed beverage establishments is not an expansion of gaming.  It simply levels the playing field so that all adult only establishments licensed to serve alcoholic beverages can offer the same legal entertainment amenities to their customers.

• Indiana has allowed largely out-of-state owned casinos to reap millions in profits from gaming every month, but the state has turned its back on the small locally owned licensed beverage establishments.

• Legalized pull-tabs in all licensed establishments would create additional tax revenues for the state and additional revenues for businesses.

NO NEW TAXES 

Key Points: 

• While recognizing Indiana’s current dilemma with regard to dwindling revenues, we would urge that only minimal increases should be considered, as a last resort.  State budget trimming should take priority over increased taxes.

• Higher beer excise taxes should be rejected by the legislature. Higher beer excise taxes will hurt those the most who can least afford it. If higher taxes are needed, broad-based taxes are a better way to raise funds, and are fairer because they don’t target one group and will do the least harm to the state’s economy as it works to recover.

• Beer taxes are high enough already: People already pay a lot of taxes when they drink a beer. On average, 44% of the cost of a beer is taxes.

• Beer taxes cost jobs: Making and selling beer in Indiana directly employs 15,500 people and results in $600 million in economic activity. A beer excise tax increase will cost jobs. In 1990, when the Federal beer excise tax was raised, thousands of people lost their jobs. Indiana doesn’t need job losses now. Harming local Indiana businesses will cause job losses and, as a result, increased costs for welfare and unemployment compensation.

CLOSE LOOPHOLE IN 210 PERMITS 

Key Points: 

• Support legislation to close a legal loophole involving holders of 210 permits who were in business prior to their location being included in a designated River Walk Development Area or Historic Area. Increasingly, these permit holders are making application for the River Walk or Historic Area alcoholic beverage permit.  Once they obtain this special permit for the $750 fee, they are selling their existing permit on the open market for substantial profits. This practice puts other 210 permit holders in the area at a significant economic and competitive disadvantage.

QUOTA SYSTEM 

Key Points: 

• ILBA opposes piece-meal granting of licenses outside the quota system.

• Opposes further expansion of the quota system.

• Supports the continued benefits of protecting the three-tier alcoholic beverage system.

MANDATORY SERVER TRAINING 

Key Point: 

• ILBA supports mandatory server training and will continue working with the ATC to insure that all servers are properly trained. 

OPPOSE STATE MANDATED SMOKING BANS 

Key Points: 

• ILBA opposes legislation designed to mandate State smoking bans in bars and taverns.
• ILBA continues to favor an individual’s right to choose as it relates to smoking preferences.