A new casino licence could soon be up for grabs in Indiana after the state House of Representatives approved legislation that would allow four counties to compete for a relocated gaming licence. Notably absent from the list is Marion County, home to Indianapolis, despite earlier studies identifying the capital as the most lucrative potential market.

House Bill 1038, authored by Rep. Craig Snow and backed by multiple co-sponsors, passed the House on 2 February by a 67-30 vote. The measure has been referred to the Senate Committee on Public Policy and faces a tight timeline: it must clear the Senate by the end of the month to remain on track to become law.

If enacted, HB 1038 would permit Allen, Steuben, DeKalb and Wayne counties to bid for the licence currently tied to Rising Star Casino Resort in Rising Sun. The property, operated by Nevada-based Full House Resorts, has consistently ranked as Indiana’s lowest-performing casino, in part due to expanded competition in neighbouring Ohio and Kentucky.

Full House has sought legislative approval to relocate the licence for several years. Those efforts gained renewed attention last year when lawmakers passed SEA 43, commissioning a market study to evaluate potential relocation sites. The September report identified downtown Indianapolis and Fort Wayne as the two strongest candidates from a revenue perspective.

However, separate bills proposing relocations specifically to Indianapolis and Fort Wayne failed to gain traction. The exclusion of Indianapolis from HB 1038 — both as a standalone option and within the broader compromise framework — appears to signal, at least for now, the end of the capital city’s prospects for hosting a casino.

Cannibalisation Concerns Shape Legislative Strategy

The decision to omit Indianapolis is widely viewed as a risk-management move tied to concerns over market cannibalisation. While the commissioned study concluded that a casino in Indianapolis would generate the highest revenue potential, it also warned that such a development would significantly erode revenue at existing gaming properties. The two operators projected to be most affected — Horseshoe Indianapolis in Shelbyville and Harrah’s Hoosier Park in Anderson — are racinos that play a central role in supporting Indiana’s horse racing industry.

By contrast, a casino in the Fort Wayne region was projected to produce more modest revenue but with less competitive disruption to current licensees. That balance of growth potential and reduced cannibalisation appears to have made northeast Indiana a more politically viable compromise.

Three of the four counties eligible under HB 1038 — Allen, Steuben and DeKalb — are located in the greater Fort Wayne area, intensifying what is expected to be a competitive bidding process.

Senate President Rodric Bray expressed optimism about the bill’s prospects despite the compressed legislative calendar.

“There continues to be support, I think, building for the idea of some option to move a casino up into northeast Indiana,” Bray said last week, according to the Indiana Capital Chronicle. “The study obviously shows that it would be profitable up there. So, I look optimistically at the movement of that bill.”

While the market study identified Indianapolis as the most lucrative relocation option, lawmakers ultimately prioritised limiting competitive disruption to existing casinos, reshaping the path forward for the Rising Star licence.

Competitive Bidding Process Outlined

HB 1038 establishes a structured relocation process overseen by the Indiana Gaming Commission. Although the Rising Star licence is currently held by Full House Resorts, all 13 existing casino operators in the state would be eligible to submit proposals for the new location.

Bidders would need formal endorsements from local mayors and county commissioners, though the bill notably does not require a voter referendum — a departure from precedent, as prior Indiana casino developments have typically been subject to local approval at the ballot box.

The commission would select a winning proposal by 15 April 2027. If the licence were awarded to an operator other than Full House, the successful bidder would be required to pay fair market value for the Rising Star property, as determined by regulators. In addition, the winning operator would face a $50 million relocation fee payable over five years and would be required to commit at least $500 million in capital investment for the new development.

One of the most contentious unresolved issues involves compensation for Rising Sun and Ohio County, which would lose the casino and its associated tax revenue. The current draft of the bill proposes $30 million in compensation. Local officials have argued that this amount is insufficient, noting that the property generates approximately $5 million annually in tax revenue. Lawmakers are considering whether to convert the payment structure from a fixed total into an annual allocation in perpetuity.

As the bill moves to the Senate, legislators face the dual challenge of balancing regional economic development with market stability and local political considerations. The outcome could reshape Indiana’s gaming landscape — while leaving its capital city on the sidelines for the foreseeable future.