Legalized gambling came late to Indiana. Before the state began its lottery in 1991, it had been one of only three in the United States that had no legal gambling. Although the effort to establish the lottery was ongoing, a campaign for casinos was also taking place. Following several years of lobbying efforts and studies of a variety of proposals, the state legislature passed a riverboat gaming law over the veto of Gov. Evan Bayh in 1993. The next legislative session authorized horse-race betting within the state.
The strongest motivation for approving casino gambling was provided by the fact that several casino boats in Illinois were drawing much of their revenue from Indiana residents. Four Illinois casinos were in suburban Chicago within fifty miles of the Indiana border, and another license was held by a boat in southern Illinois within a short driving time of the Evansville metropolitan area.
Indiana’s new law authorized licensing of eleven casino boats for counties bordering Lake Michigan waters as well as on the Ohio River and Patoka Lake. The licenses can be granted only if the residents of the county where the boat operates approve casino gaming in a referendum vote. Most of the gaming-eligible counties held votes; some were positive and some were negative. The Patoka Lake license has not been activated, as the United States Army Corps of Engineers was determined to own the rights to control the water of the lake.
On 9 December 1994 the first two licenses were awarded, but there were legal difficulties. The federal Johnson Act prohibited gaming on the Great Lakes (see The Gambling Devices Acts [the Johnson Act and Amendments]). The state had claimed an exemption to the provisions of the act in the riverboat legislation, but the matter had to be clarified in Congress, with the attachment of a rider to the Coast Guard Reauthorization Act of 1996 that exempted Lake Michigan waters from the Johnson Act for purposes of gaming on Indiana-licensed casino boats. Difficulties with the Ohio River arose, as the waters of the river were within Kentucky. This was resolved by requiring boats on the river to cruise within a short distance of the shore.
The 1993 legislation created an Indiana Gaming Commission of seven members appointed by the governor. The governor also appointed the executive director of the commission. Nine casino boats were in operation by 1999. They accomplished at least some of their original purpose. Revenues for Illinois boats experienced a small decline while Indian boats surpassed Illinois revenues.
The commission has a very wide range of powers. It may make any rules necessary for carrying out to mandates of the 1993 act. Additionally, it accepts applications for licenses and conducts all investigations of applicants, including investigations into personal character. It selects the licensees and oversees their operations. It takes all disciplinary actions if rules are violated and may revoke licenses, which are granted for a five-year period. The boats must be at least 150 feet in length and have the capacity to carry 500 persons.
The first boat to begin operations was Casino Aztar in Evansville; it opened its doors for gaming on 8 December 1995. Casino Aztar is a 2,700-passenger boat with 35,000 square feet of gaming space.
Two boats started gaming on 11 June 1996. Both are docked in Gary, Indiana. Donald Barden’s Majestic Star is a 1,500-passenger vessel with 25,000 square feet of gaming space. Donald Trump’s Trump Casino occupies 37,000 square feet of gaming space on a 2,300-passenger boat.
On 29 June 1996, the Empress Casino boat began cruises in Hammond. The 2,500-passenger vessel has a gaming floor of 35,000 square feet. Hyatt’s Grand Victoria Casino and Resort started cruises in Rising Sun on 4 October 1996. The boat was the first casino to invade the Cincinnati, Ohio, metropolitan area. It carries 2,700 passengers and has a gaming floor with 45,000 square feet.
The Argosy Casino began operations on the Ohio River at Lawrenceburg, also near Cincinnati, Ohio, on 13 December 1996. The 4,000-passenger yacht has a gaming floor of 74,300 square feet.
The Showboat Mardi Gras Casino started cruises out of East Chicago on 18 April 1997. It has gaming space of 53,000 square feet and carries 3,750 passengers. On 22 August 1997, the fifth Lake Michigan boat license was activated as the Blue Chip Casino opened in Michigan City. The 2,000-passenger vessel has 25,000 square feet of gaming space. The ninth boat to begin operations is at Bridgeport, across from the Louisville, Kentucky, metropolitan area. It is operated by the same company that runs the Caesars Palace casino in Las Vegas. The City of Rome riverboat carries 3,750 passengers and has 93,000 square feet of gaming space. Gaming began in late 1998.
The tenth license is reserved for the Ohio River area and may be granted for a boat near either the Cincinnati or the Louisville population base.
The casino boats must go out into waters for cruises, although one off Lake Michigan has a special channel for its cruises. An amendment to the original 1993 law clarified conditions when the boats could remain docked. Basically, these include any times the boat captain would determine that safety required that the boats remain docked. In any case, the boats are required to have two-hour cruises. If the boat is docked, the cruises are mock cruises.
The casino boats pay a gross gaming tax of 20 percent of their win. Of this amount, one-quarter goes to the city where the boat is docked (or county if not in a city), and three-quarters goes to the state’s general fund. There is a three-dollar admission fee, which is also shared among state and local governments.
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