Indiana’s Online Casino Bill Clears First Hurdle

Indiana’s latest attempt to legalize online casinos and iLottery has taken a step forward, but a familiar obstacle looms: the fiscal note. House Bill 1432 (HB 1432) advanced out of the House Public Policy Committee with amendments, yet its fate may hinge on an upcoming financial analysis that previously derailed similar efforts. Lawmakers in the House Ways and Means Committee will be the next to review the bill, but without a clear financial projection, its progress remains uncertain.

 

The Developments

Filed by Rep. Ethan Manning and supported by three co-sponsors, HB 1432 seeks to establish a regulated framework for online casino gaming, similar to Indiana’s existing online sports betting model. The bill also includes provisions to allow the Indiana Lottery to sell tickets online, expanding access to digital lottery sales. Additionally, it sets aside funding for research and treatment related to gambling addiction, acknowledging concerns over the potential risks associated with increased accessibility to online gambling.

On Wednesday, the Public Policy Committee gave the bill a favorable recommendation, moving it one step closer to a full House vote. However, its next stop in the Ways and Means Committee comes with an unresolved question: how will online gambling impact state revenue? That answer lies in the fiscal note, a financial analysis that has historically shaped—and in some cases, derailed—Indiana’s gambling legislation.

A fiscal note is an official estimate of how a proposed bill will affect state revenues and expenditures. In 2023, a similar effort to legalize online casino gaming fell apart largely because of a controversial fiscal note that projected a significant shift in revenue away from land-based casinos. The report estimated that as much as 30% of in-person casino revenue would be displaced by online gambling, a claim that met immediate resistance from industry experts and lawmakers alike. Indiana Sen. Jon Ford criticized the analysis as “one of the worst documents I’ve seen come out of our legislative services.” Opponents of that projection argue that it failed to consider how online gambling could attract a new customer base rather than cannibalizing existing revenue streams. Since then, two independent studies have concluded that online casino gaming is unlikely to negatively impact brick-and-mortar casinos in Indiana, instead suggesting that it could generate additional tax revenue for the state. The question now is whether the fiscal note attached to HB 1432 will reflect these updated findings or repeat the same concerns that led to the failure of the 2023 bill.

A key difference this time around is the stance of Indiana’s casino industry. In the past, resistance from casino operators has contributed to skepticism about online gaming, with fears that digital platforms could cut into their business. This year, however, the industry appears to be aligning behind the bill. At the Public Policy Committee hearing, a representative from the Indiana Casino Association testified in favor of HB 1432, emphasizing that online gambling could be a financial win for both casinos and the state.

Under the bill’s framework, online casino operators would be required to partner with existing casinos and racetracks, ensuring that a portion of the revenue remains within the state’s gambling infrastructure. This partnership model mirrors how Indiana structured its online sports betting market, which has proven successful since its legalization in 2019. The support of the Indiana Casino Association could help ease concerns among lawmakers who worry about revenue displacement, particularly if the forthcoming fiscal note acknowledges these partnerships as a mitigating factor.

 

It was one of the worst documents I’ve seen come out of our legislative services.

 

The Future

HB 1432 still faces significant obstacles before it can become law. The Ways and Means Committee has a hearing scheduled for Jan. 30, but as of now, HB 1432 is not on the docket. Its absence from the schedule suggests that lawmakers may be waiting for the fiscal note before moving forward. Even if the committee ultimately approves the bill, it must then pass a full House vote, followed by additional scrutiny in the Senate. This is Indiana’s fourth attempt in five years to legalize online casino gaming, and the outcome remains uncertain.

If the fiscal note suggests a net positive impact for the state, the bill could have a real chance of passing. However, if it echoes the 2023 analysis, even strong industry support may not be enough to keep it alive. The next few weeks will be critical in determining whether Indiana finally joins the growing list of states embracing online casino gaming or if history will repeat itself once again.