A bill to legalise online lottery and casino offerings has hit a dead-end in Indiana’s current legislative session. This was confirmed on Thursday, February 13, 2025, by House Speaker Todd Huston.
Officially known as House Bill 1432, the legislation would decriminalize online casino and lottery offerings in the State of Indiana. Earlier this year, Bill 1432 passed seamlessly through the House Public Policy Committee. However, the legislation was not reviewed by the Ways and Means Committee, which is looking at the financial side of things.
On Thursday, Huston described the legislation as a ‘complex’ bill with ‘lots of different moving parts.’ In his words, difficult to find something everyone could agree on, which made the situation challenging.
What the Bill Would Have Achieved
If the legislation managed to pass all the stages, it would have allowed the state’s licensed casinos to add iGaming to their offerings. This also applies to the Hoosier Lottery, which would have been allowed to launch online lottery products.
The bill’s author is Rep. Ethan Manning, R-Logansport and he believes that online gambling is a chance to revolutionise Indiana’s gambling industry while also handling responsible gambling issues. Others argue that gamblers in the state already play on offshore sites, so it makes sense to legalise iGaming and secure more tax revenue for the state.
Previously, Manning commented that the legalisation might be able to generate over US$300 million in new tax revenue every year for the state. This could be achieved through the taxation of online gaming and sports betting offerings.
Challenges and Opposition
Additionally, Huston praised Manning for his stewardship but explained that the legislation would affect representatives of the gambling industry. He also noted that at least one casino did not support the iGaming expansion. Here’s what else he said:
“There’s all sorts of moving parts about how it impacts certain communities, what it does to the overall gaming environment in Indiana. I think all those things just make it complex to work through.”
Raising Concerns about Problem Gambling
However, others reminded that the iGaming initiative may lead to an increase in problem gambling in the Hoosier State. They argued that online gambling is much more addictive than in-person betting and can lead to financial issues, crime, and suicide.
That is why a provision was added to the bill, which would have seen the development of a brand-new program devoted to responsible gambling and the treatment of addiction. There were previous attempts to legalise iGaming in Indiana, but those efforts were mainly based on raising awareness. This time, the bill would have set aside funds for treatment and research on the topic.
Licencing and Tax System Under Bill 1432
At the moment, Bill 1432 says that gambling operators will be taxed at a fixed rate of 26% until July 2026. After that, the state will switch to a different tax system, which will vary between 22% and 30% based on revenue performance. However, only existing casinos and racetracks will be allowed to apply for a license.
If the bill is passed, the Indiana Gaming Commission can start taking applications, which could see iGaming commence as early as September 1, 2025. Additionally, there will be a condition that every licensed operator must provide an annual fee of US$250,000 to a problem gambling initiative. If required, the commission will mandate that operators bring an additional sum of up to US$2 million per annum.
Hoosier Lottery Backs the Bill
Indiana’s Hoosier Lottery has also voiced its support for the legislation. The institution says that the online lottery would help it generate more revenue and attract new players. If it comes to fruition, Indiana will be the 15th state to launch digital lottery products.
Over the years, the Hoosier Lottery has provided over US$7.4 billion to the state’s budget. Thus, supporting various public initiatives, alongside pensions, gasoline tax offsets, and more. The lottery believes that the digital expansion would benefit its operations instead of damaging its retail activities.
Under the submitted legislation, the Hoosier Lottery would have been required to provide £500,000 annually to support responsible gambling practices. The bill also includes other provisions, such as revenue-sharing with local communities, enhancements to voluntary exclusion programmes, and the conduct of more in-depth gambling-related studies with assistance from a local university.
What’s Next?
Despite the recent setback, it seems that the discussion around iGaming in Indiana is far from over and will be a key topic in the coming years. There are plenty who are in favour of the online gambling expansion. However, it remains to be seen how the next attempt would find a balance between competitive interest from private operators and address the concerns about problem gambling.
In the future, lawmakers like Rep. Ethan Manning may give the expansion another go, but they will most likely have to revisit the tax structure, licensing fees, and responsible gambling protections.
