A bill proposing the legalization of online casino gaming and the sale of lottery tickets in Indiana has been passed by the House Committee, which voted 9 to 2 in favor of the bill. Another bill would authorize electronic pull tab machines in bars. These bills signify the most viable expansion measures in Indiana since sports betting was legalized in 2019.

In a move that could mark Indiana's most significant gambling expansion since sports betting was legalized in 2019, a House committee has endorsed a bill to allow online casino games and digital lottery ticket sales. The House Public Policy Committee voted 9 - 2 in favor of the proposal on Tuesday, pushing forward legislation that would authorize the Hoosier Lottery to sell tickets online and permit online casino games such as blackjack and poker.

The committee also approved a separate bill allowing charitable organizations and bars to install electronic pull-tab machines, shifting from traditional paper-based pull tabs to digital versions.

Support for online gaming expansion

House Bill 1432, introduced by Ethan Manning, Public Policy Committee Chair, aims to officially authorize and regulate online casino games in Indiana starting September 1. The bill would also enable the Hoosier Lottery to begin selling instant tickets and digital jackpot draw tickets beginning July 1. Manning emphasized that many Hoosiers already engage in online casino gaming through offshore platforms that offer no consumer protections or responsible gambling programs.

"This is happening already," Manning said. "Let's authorize it; let's regulate it; let's make it appropriate. And, obviously, we see huge potential for tax revenue." Similar iGaming legislation has been proposed in Indiana in previous years but failed to advance. However, states that have already legalized online casino gaming have seen significant revenue gains, making the proposal more appealing to lawmakers this session.

A report from the Legislative Services Agency estimates that Indiana’s online casino market could generate between $522 million to $1.04 billion in annual revenue within three years. While this would be partially offset by a $98 million to $197 million decline in brick-and-mortar casino revenue, the state stands to collect an additional $85 million to $186 million in gaming tax revenue over three to five years. The bill proposes a 26% flat tax on online gaming revenue until mid-2026, after which a graduated tax scale will take effect, ranging from 22% to 30% based on earnings.

Hoosier Lottery to go digital

The proposed bill would also allow the Hoosier Lottery to sell tickets online, with expected digital sales reaching $314 million to up to $629 million within three years. This expansion could add between $34 million to $94 million in state lottery profits, complementing the $364 million in profits recorded in the last fiscal year.

Jared Bond, the Hoosier Lottery's director of external affairs, reassured committee members that digital lottery sales are unlikely to negatively impact retail ticket purchases. "This new delivery channel actually attracts new players, increases awareness of lottery products, and increases brick-and-mortar sales as well," stated Bond, citing data from other states that have introduced online lottery sales.

Concerns over accessibility and gambling addiction

While casino operators largely supported the online gaming expansion, some expressed concerns over its potential impact on in-person gambling venues. Churchill Downs, which owns the Terre Haute casino, warned that increased online gambling could reduce foot traffic to casinos, affecting hotels, entertainment venues, and restaurants associated with them.

There's an assumption that iGaming will eliminate the black market, but that's hopeful at best and unrealistic at worst, stated Oliver Barie, a lobbyist for Churchill Downs. Additionally, Rep. Matt Lehman and Rep. Peggy Mayfield voted against the bill, citing concerns over gambling accessibility, particularly for minors. I get that we want to make this easier for a 45-year-old guy who has the means to gamble, Lehman said. "(But) I'm concerned where we're going when we're allowing more and more access."

Electronic pull tabs bill moves forward

In a separate vote, the committee unanimously approved House Bill 1433, which would permit bars and charitable organizations to install electronic pull tab machines. These machines would replace traditional paper pull tabs and are seen as a way to modernize gaming options for community groups.

Veterans organizations, which currently rely on gaming revenue to support charitable initiatives, strongly advocated for the measure. "Electronic pull tabs are a game changer that will revitalize our posts in Indiana and increase the revenue to support more local charities and causes we hold dear," stated Richard Leirer, a former state commander of the Veterans of Foreign Wars.

However, some casino officials opposed the bill, arguing that electronic pull tabs resemble slot machines but would face far less oversight than traditional casinos. Matt Bell, president of the Casino Association of Indiana, warned that the bill could fundamentally alter the state's gambling environment. We are moving from a highly regulated and controlled gambling industry to one where gaming machines are present in every tavern, bar, and civic organization, Bell stated.