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Velimir Velichkov January 18, 2024 3 min read
Study Suggests Indiana Can Rake in Millions in Tax Revenue from iGaming
The recently released report, prepared for the gambling regulator in the state, highlights the benefits of the legalization of online gambling
Currently, less than ten US states offer legal online gambling activities. Unlike sports betting which is available in close to 40 states, iGaming activities are yet to lift off and expand across the country. Major online gambling markets are New Jersey, Pennsylvania, as well as Michigan. Considering the benefits the activity can bring, different states are exploring the potential of legalizing online gambling.
In 2022, a report highlighted the benefits online gambling can bring to Indiana. Now, the state’s gambling regulator, the Indiana Gaming Commission (IGC), once again requested Spectrum Gaming Group to analyze the sector and submit predictions on how the state can benefit from online gambling activities.
Released last week, the report revealed that the legalization of iGaming can bring significant tax revenue for Indiana and create new jobs. The estimates in the latest report surpassed the figures from the 2022 whitepaper, underlining the strong potential of the market in the state.
The latest report predicted three different scenarios with a tax rate varying between 20% and 45%. If taxed at 20%, iGaming activities are expected to yield some $98 million in tax for the first year, followed by $139 million and $176 million for the second and third years.
In case the state applies a 30% tax for online gambling, tax revenue is expected to hit $147 million for the first year, while the second and third years of operation are expected to bring $209 million and $264 million respectively.
At the higher end of the proposed tax rate, at 45%, proceeds from iGaming for the first year are expected to hit $220 million. In the second and third years, the tax revenue from iGaming is expected to hit $313 million and $396 million.
Sports Betting and iGaming to Create “Revenue Synergies”
Based on the estimated tax revenue depending on the tax rate, Indiana may benefit anywhere between $413 million and $929 million for the first three years of legal online gambling, according to the report from Spectrum Gaming Group. The estimated data underlines the potential of the market, considering that the state may rake in close to $1 billion in taxes for the first three years of legal iGaming.
Besides tax revenue, the recent report predicts that legalized internet casinos can create new jobs. More importantly, iGaming together with online sports betting can create “revenue synergies,” explains the report. “Two national digital gaming operators reported that players who participate in both iGaming and sports betting spend significantly more than players who participate in only iGaming or only sports betting,” reads the new report.
Despite the projected benefits, Indiana lawmakers are yet to take meaningful action toward the legalization of online gambling.