Indiana Proposes Legal Online Casinos in 2025 Bill

Indiana Representative Ethan Manning announced his proposal to introduce legal online casinos as part of a broad gambling expansion bill, HB1432, during the state’s 2025 legislative session, which began on January 21. The bill aims to allow retail gambling operators to partner with online casinos and introduce an online lottery for Hoosiers, making significant revisions to the state’s gambling laws.

Under the new bill, all of Indiana’s casinos and racetracks would be eligible to apply for an online casino license. This license, priced at $500,000, would grant the operator access to up to three “skins” or branded platforms for online gambling, including slots and table games. The Indiana Gaming Commission, which already regulates casinos, racetracks, and sports betting in the state, would oversee the online casino operations.

The bill also includes the establishment of the Indiana Responsible Gaming and Problem Gambling Services Program fund to address gambling addiction issues.

High Tax Rate Proposal

HB1432 proposes a tax rate of 26% for Indiana’s online casinos in their first year, with a sliding scale ranging from 22% to 30% depending on operators’ adjusted gross receipts (AGR). While this rate aligns with recommendations from the National Council of Legislators from Gambling States (NCLGS), it is higher than the 15% to 25% tax rates suggested by NCLGS President Shaun Fluharty. For context, the national average for online casino tax rates is 19%.

 

Potential Revenue Boost

The introduction of online casinos in Indiana could generate a new source of tax revenue for the state, adding hundreds of millions of dollars annually. If successful, Indiana's iGaming industry could exceed $2 billion in its first three years, contributing over $500 million in tax revenue. This would be a significant boost, especially considering that other states with online casinos saw iGaming account for between 68% and 83% of their online gambling revenue totals in 2024.

This marks Indiana’s fourth attempt in five years to legalize online casinos. Previous bills, including those in 2021 and 2023, failed to advance due to a combination of legislative opposition and flawed fiscal projections. In 2023, a misleading report from the Indiana Legislative Services Agency, which claimed iGaming could hurt brick-and-mortar casinos by up to 30%, caused the bill to stall.

Despite these setbacks, Manning is undeterred. After the 2023 legislative failures and the gambling-related corruption charges involving former Rep. Sean Eberhart, Manning is introducing a more expansive gambling bill for 2025, which also includes online slots, table games, and lottery sales.

 

If successful, Indiana's iGaming industry could exceed $2 billion in its first three years, contributing over $500 million in tax revenue.”

 

Future Prospects

HB1432 must clear both legislative houses and be signed by newly-elected Governor Mike Braun to become law. Braun, who took office in January 2025, expressed support for online gambling expansion during his campaign. If the bill passes, Indiana could see its first legal online casinos launch by September 1, 2025, marking a significant milestone in the state’s gambling landscape.

Manning’s efforts, backed by a comprehensive approach to gambling reform, could set the stage for Indiana to join the growing list of states that have embraced online casinos, opening the door for both new revenue and expanded gambling opportunities.