Online lottery and gaming back on the table in major proposed Indiana gaming expansion

Indianapolis Star

Updated Jan. 6, 2026, 3:25 p.m. ET

There's a renewed effort to legalize both online lottery sales and online gaming in Indiana.

Taken together, these would constitute the largest gaming expansion in the state since the legalization of sports betting in 2019. It's already potentially a big year for gaming expansion in Indiana, with lawmakers seriously considering adding or relocating a casino license to potentially the Indianapolis or Fort Wayne areas.

Both iLottery and iGaming, as lawmakers are colloquially calling them, were pitched as part of one bill that failed to advance past the committee state last session. This year they are trying a different tack by splitting them up.

On Jan. 6, a House committee passed a bill dedicated to digital lottery legalization by a 9-3 vote; the same committee then proposed adding online gaming language to a routine administrative bill. That second bill will come up for a vote the next time the public policy committee meets.

The push for an internet lottery

The Hoosier Lottery, a privately run lottery overseen by a state commission, nearly added online lottery sales on its own in 2022. Then lawmakers passed a law that requires legislative approval for such an action. Now, that's the change being pitched in House Bill 1078.

At stake is a matter of sustainability for the lottery, which has an aging customer base and seeks to attract younger buyers who increasingly shop online, even though online lottery games are likely to have smaller profit margins.

"This really is a modernization of the Hoosier Lottery," said Jared Bond, director of external affairs.

But with this being a non-budget year, there are not as many incentives included this year's iLottery bill to sweeten the deal for brick-and-mortar retailers concerned about the impact of in-person sales at their businesses.

In estimating that online sales would result in overall annual profits of about $30-90 million, the Legislative Services Agency is assuming there would be an accompanying decrease in retail lottery sales.

But a 2022 study by Spectrum Gaming of other states that have legalized iLottery, such as Michigan in Pennsylvania, concluded that retail sales grew roughly in parallel to iLottery sales.

Bond said the Hoosier Lottery would adopt the strategies other states employ, such as cross-promoting digital and retail tickets. But that's not enough to convince the state's 400 7/11 and Speedway convenience stores, whose lobbyist Patrick Tamm said wants to see included the retail incentive program the committee passed last year. This program would have compensated retailers who promote the iLottery.

Retailers also think the commission structure should be revisited. They currently make 6% of the price of a ticket sold in their stores, but that figure hasn't changed in more than a decade, and now half is eaten up by swipe fees on credit cards, said Matt Norris, representing the Indiana Food and Fuel Association.

Bill author Rep. Ethan Manning, R-Logansport, said with this being a short session, his goal is just to get iLottery authorized. If promotional strategies aren't enough to keep retailers whole, they could revisit the incentives during the budget session in 2027.

Another stab at iGaming

Think slots and poker, just like you'd play at a casino, but on your phone or computer.

There's an underground market for this anyway, argued Democratic Fort Wayne Rep. Kyle Miller in introducing an amendment to a routine agency bill that would give the state power to regulate online gaming.

"Banning something doesn’t necessarily take it out of the market," Miller said. "We’re punishing the good actors in this space and rewarding bad actors."

The language also includes a problem-gambling fund to pay for prevention and treatment programs for those struggling with gambling addition.

Rep. Peggy Mayfield, R-Martinsville, expressed reservations with inserting significant public policy into a broad bill that contains mostly tweaks that other Indiana agencies need

"We’re talking about a substantive policy issue, in my mind, in an administrative bill," she said. "It’s not the first time we’ve done it, it won’t be the last. ... I think it deserves more discussion."

That's why Manning said he opted not to hold a vote on Jan. 6.

When the concept was proposed last session, fiscal analysts estimated that within three years, online gaming would net the state about $85 million to $186 million in tax revenue, even after they consider a hit in revenue to brick-and-mortar casinos. Some casino operators or lobbyists testified against the bill for that reason, while others considered it a way for casinos to grow their overall market.

Another aspect being debated in this bill is whether to regulate or outright ban sweepstakes ― online games that mimic currently illegal gambling and involve exchanging payment for some sort of monetary prize. The same debate is playing out over off-brand marijuana products like Delta-8, which are derived from hemp. (There's a proposal to add to the bill a ban on the sale of hemp-derived products to people under 21 years old, too).

"This is a delta-8 approach to iGaming," state Rep. Ed Clere, R-New Albany, referring to a proposal to regulate, rather than ban, sweepstakes.

House Bill 1052 hasn't yet been formally changed; that could happen as soon as next week.