The conviction of a former Indiana state legislator on bribery charges related to a 2019 gaming bill has led to a pause on any bills for online casino gaming to be heard in the Hoosier State for 2024.

Former Indiana Rep. Sean Eberhart agreed to plead guilty this month to a federal charge of conspiracy to commit honest services fraud filed by the U.S. Attorney’s Office for the Southern District of Indiana. Prosecutors said he used his position and voted in favor of “terms favorable” for Spectacle Gaming to relocate two casinos in the state in exchange for a position with Spectacle for a $350,000 annual salary.

Eberhart’s plea has resulted in state legislators agreeing not to bring forward any gaming legislation in the statehouse in 2024, according to an Indiana Public Broadcasting report. That comes as a blow to the gaming industry, which long has considered Indiana to be the state most ready to expand into the potentially lucrative but still limited internet casino gaming.

“It taints the statehouse, it diminishes the confidence that people have and the integrity of the statehouse,” Indiana Senate Pro Tem Rodric Bay told Indiana Public Broadcasting of Eberhart’s guilty plea. “It causes an awful lot of problems and makes it particularly difficult to engage in that kind of policy.”

Indiana legislators introduced internet casino gaming bills each of the last three years, but none of them ever progressed beyond committee. This year’s bill authored by Rep. Ethan Manning — who heads the House Public Policy Committee that has jurisdiction over gaming — was hampered by a fiscal note from the Office of Fiscal Analysis and Management that estimated iGaming revenue could displace “up to 30% of existing gaming revenues.”

Why Indiana for iGaming?

Indiana is considered a mature gaming market, having been one of the first states to legalize sports wagering in 2019 following the PASPA ruling by the U.S. Supreme Court. Legal sportsbooks have accepted more than $13.8 billion worth of wagers since launch — nearly 90% of which has originated online — with operator revenue just shy of $1.2 billion, generating more than $113.8 million in state taxes.

In terms of casino gaming, Indiana most recently opened a casino in May 2021 — Hard Rock Northern Indiana — and now has 10 casinos and two racinos statewide. It will add an 11th venue in early 2024 when Churchill Downs opens its $250 million casino in Vigo County — the same license Spectacle Gaming once held.

Monthly casino revenue in Indiana has averaged more than $200 million through the first 10 months of 2023, and its three venues in the northwest part of the state — all located inside an hour’s drive from Chicago — have been successful in bringing in business from neighboring Illinois even with Bally’s opening a casino in downtown Chicago in September.

The success neighboring Michigan has had with internet casino gaming — the Wolverine State has reported operator revenue close to $1.6 billion in 2023 that has resulted in $286.9 million in state taxes — also contributed to Indiana being a logical choice that would be well-suited to add internet casino gaming as an option for bettors.

Six states currently offer internet casino gaming, with Rhode Island expected to launch early next year.

Eberhart, Spectacle, and Vigo County

Eberhart, who served on the House Committee on Public Policy, was accused of reaching an agreement with Spectacle Gaming officials regarding the relocation of two casino licenses on the Lake Michigan waterfront to Gary and Vigo County. Spectacle Gaming was created in 2018 following the sale of Indiana Grand — now Horseshoe Indianapolis — to Caesars.

The bill considering Spectacle’s relocation of the casino licenses also included the gaming company paying a transfer fee. According to the federal charges, an unnamed owner of Spectacle Gaming offered the promise of future employment with the company at an annual salary of $350,000. Eberhart, who accepted the agreement, advocated in support of the license relocations and introduced language into the bill that reduced Spectacle’s transfer fees from $100 million to $20 million.

Spectacle Gaming’s impact on gambling plans in the Hoosier State has been notable. It was originally a partner with Hard Rock to bring casinos to both Gary and Vigo County. While Hard Rock Northern Indiana opened in May 2021 and has become the state’s top gaming revenue generator, it had to assume 85% of ownership of the venue in August following a summer in which then-Spectacle CEO Rod Ratcliff relinquished his ownership stake and casino owner’s license as part of a series of violations leveled by the Indiana Gaming Commission.

Ratcliff’s sale of his ownership stake also impacted Vigo County, where Spectacle Gaming held the casino license under its subsidiary Spectacle Jack. It sold the license to Spectacle co-founder Greg Gibson, who renamed the company Lucy Luck, but the IGC rejected a renewal of the license in June 2021 and reopened the process.

That led to Churchill Downs beating out three competitors, including Lucy Luck, for the license in November 2021. The Kentucky-based gaming company known primarily for horse racing broke ground on the venue in June 2022.

Photo: Getty Images