A new law gives Indiana lawmakers more power over the Indiana Gaming Commission.
In the past, the commission could use any money it collected in fines to fund its enforcement efforts. That’s no longer the case after lawmakers recently passed a bill.
Now, the commission must seek approval from lawmakers on the State Budget Committee before moving around funds. The law gives the agency more funding, but the commission can no longer use money from fines as it sees fit.
The new law appears to stem from past issues concerning the amount of fines the commission has levied on the state’s casinos.
Some lawmakers think the IGC is too harsh on Indiana casinos
The IGC regulates the gambling industry in Indiana, including the state’s 12 casinos.
Indiana online casinos would likely be under their purview as well. But leadership from both legislative chambers said they wouldn’t debate any gambling legislation this year after a former state lawmaker was embroiled in a corruption scandal with gambling companies.
One of the main gripes Republican lawmakers have with the IGC is how it hands out fines, Sen. Chris Garten told local media.
“It appears that the ideology is because casinos are profitable in Indiana, we should be able to fine them more.”
The commission, however, believes its fines are fair and that they are in place to force compliance. But Garten said he thinks the group is “just charging whatever the heck” it wants from casinos.
Strict regulations in the casino industry are common. However, consistency is where Garten and some of his fellow lawmakers see an issue.
Casino settlements between the IGC and operators in the state seem to vary. Settlement totals surpassed $900,000 in both 2018 and 2022, but fell below $430,000 in 2017 and 2019. From the data available, 2023’s fines totaled $412,100 up until June 15.
Garten said he believes there are “major, major issues” with the commission and said that discussions with the group “show the subjectivity of an agency.”
In the meeting, Garten read several complaints from casinos against the IGC. Indiana’s casino operators have called the state “the most punitive state we operate in.” Additionally, Garten said they fear “retribution” from the commission’s deputy director, Jenny Reske.
IGC says its fines are fair, but it will comply with the new law
IGC Executive Director Greg Small said his group is “professional, knowledgeable and fair.”
“My folks, I hold them accountable. … They know the subject matter because they have to. What we do is very complex; we cover a lot of different areas. We’ve got a lot of folks (that) I think do a great job.”
Small said the commission supports casinos.
“We also have a mandate in statute that economic performance of the casinos and their hiring is of the utmost importance, and we certainly respect that.”
In a public statement, officials from the IGC said the agency’s purpose is to protect “the integrity of Indiana’s gaming industry and to give confidence to Hoosiers and other visitors who patronize our casinos.”
“IGC does that by way of ensuring that the casino owners, key persons, suppliers and employees affiliated with Indiana’s state-sanctioned gaming facilities uphold the high standards of character, reputation, experience and financial integrity envisioned by the Indiana State Legislature. We are unable to speculate on the impetus of legislation, but the IGC will fully comply with the requirements of the bill.”
How the IGC fines Indiana casinos
Small and General Counsel Dennis Mullen explained that there is no such thing as an “automatic” fine, which Garten claimed happens frequently.
According to the two members of the IGC, each casino has on-site gaming agents. They are in charge of looking into illegal gambling or regulation infractions. When incidents are worthy, they write them up in a report.
From there, the reports head to on-site supervisors. The supervisors then send them to the agency’s enforcement assistant director. From there, the compliance committee takes a look and, if needed, will recommend a fine or other disciplinary action.
This is where Small said the IGC enters the frame. Should there be a clear violation, they will send a notice to the casino in question. That notice includes a draft settlement agreement with a fine amount. The operators have the right to dispute the report and add any context they believe is relevant. From there, a final settlement is worked out.
The IGC can issue an administrative complaint if the casino declines the settlement. In that case, the Office of Administrative Law Judges takes over.
IGC handed out a $1 million fine to Caesars in 2018
In 2017, Caesars Entertainment acquired Centaur Gaming for $1.7 billion. Centaur owns two of Indiana’s horse racetrack casinos.
That same day, the IGC fined Caesars $1 million, claiming it violated public trust and confidence in the state’s casino industry because Caesars failed to pay Indiana a $50 million license transfer fee.
A few months before receiving the fine, Caesars considered canceling plans to move its Horseshoe Southern Indiana riverboat casino to land. Caesars General Council Tim Donovan and outside lobbyist Libby Cierzniak threatened to do so unless the IGC agreed that the $50 million transfer fee did not apply.
The Indy Star reported that Caesars “lobbied state lawmakers” toward the end of the 2o18 regular legislative session. The commission saw this as pressuring regulators. The commission said Caesars’ attempt “could undermine the public’s confidence and trust in the integrity of the gaming industry of Indiana.”
It seems that lawmakers haven’t forgotten this. Again, Caesars’ fine wasn’t over a cheating scandal or a threat to customer safety or security.
From the commission’s point of view, this fine was necessary.
Lawmakers say they had ‘no intention of embarrassing’ the IGC
Sen. Ryan Mishler (chair of the Senate Appropriations Committee) and Garten wrote a letter recently to the IGC. In the letter, they asked for clarification on their questions.
Mishler said his goal was not for this conversation to reach its current point.
“I felt that we could work internally and find a solution. We had no intention of embarrassing the Gaming Commission, but later discovered they could do that on their own … I can’t comprehend why someone in your agency would be so compelled to share a letter that basically confirms that you don’t know how your agency runs. And so now, I guess I understand some of the concerns that Sen. Garten had with the lack of leadership within.”
