Hard Rock Casino Northern Indiana

State asks Gary to give back $12.2M in casino funds

Contributed By: The 411 News

Indiana state officials are not explaining how the error was made, but it is bad news for Gary.

House Bill 1448, authored by Rep. Hal Slager from Schererville, requires Gary to pay back $12.2 million in casino funds it has received since 2022.

At the January 15 meeting of the House Ways and Means Committee, Indiana’s State Comptroller Elise Nieshalla testified her office discovered Gary had received extra casino funds during the last 3 years. East Chicago and Michigan City should have received the funds, not Gary, Nieshalla said.

The comptroller said the overpayments had occurred during the previous administration.

Gary Mayor Eddie Melton was shocked when he heard about the overpayments and the solution in early January from the comptroller.

“For this bill to be brought up at the last minute to address this egregious oversight is unjust,” Melton said. “It is totally unrealistic that, according to this language, the city should have to pay anything in 2025. I worked closely with my administration and the Gary Common Council to pass a 2025 budget crafted to address the needs of Gary citizens.”

Casinos in Indiana are taxed on the wagering revenues they receive. The state collects the taxes on the revenues and it’s the duty of the state comptroller’s office to account for and report the state funds. The office then disburses a portion of the wagering revenue taxes to units of government where the casinos are located.

Rep. Slager’s bill is an amendment to the 2019 legislation, SB 552, which allowed Gary to move its casino from Buffington Harbor to Burr Street. It changes the effective date of supplemental payments to the qualified cities statute in the senate bill.

East Chicago and Michigan City are the qualified cities.

In SB 552, legislators took into consideration the loss of revenue casinos in East Chicago, Hammond, and Michigan City could expect after Gary’s new casino opened along the highly traveled corridor of Burr Street and I-80/94.

If Gary’s base year revenue rose and the base year revenues of any of the qualified cities declined, the qualified cities would receive a supplemental payment for the first 3 years after the casino moved to another location in Gary.

Gary’s two Majestic Star Casinos, once the lowest revenue generators before the move came to be the highest revenue generator in the state after the move in 2021 and had come under the ownership of Hard Rock USA.

The comptroller was designated to trigger the supplemental payments, deducting monies from Gary’s wagering tax revenues in 2022. But it never did, allowing Gary to collect an additional $12,226,400 over the last 3 years. East Chicago should have received supplemental payments of $6,474,274 in the last 3 years. Michigan City should have received $5,752,125 in the last 3 years.

Slager’s bill calls for Gary to reimburse East Chicago and Michigan City beginning this year and for the next 2 years. Hammond was removed from HB 1448 because its base year revenue didn’t fall.

The Ways and Means Committee heard testimony from Mayor Melton, Common Council Vice President Lori Latham, and Gary Comptroller Celita Green on the bill on Wednesday, January 22.

“To me, it’s going to be very hard to verify that Hard Rock Casino was the reason why they lost revenue,” Mayor Melton said. “That equation will have to consider Covid-19 and the executive orders that closed casinos down. And when the casinos re-opened, there were limits on the number of people coming in.”

Melton asked the committee to take into consideration two casinos in Illinois opening, one in downtown Chicago and another in Chicago’s south suburbs. “How can we determine the impact of Hard Rock versus all these other factors?”

Story Posted:01/27/2025