Indiana’s iGaming legislation has passed its first hurdle, being approved in a committee vote as it makes its legislative journey.
Indiana is moving closer to legalising online casino and lottery games, with the potential for regulated iGaming to launch as early as September.
House Bill 1432, which would authorise interactive gambling, was approved by the House Public Policy Committee in a 9-2 vote on Tuesday following extensive discussion.
The bill’s author, Rep. Ethan Manning, framed the proposal as an opportunity to modernise Indiana’s gaming industry while addressing responsible gambling concerns.
He highlighted the potential for the legislation to generate more than $300m annually in new revenue for the state, primarily through taxes on online gaming and sports betting. An amendment included in the bill would raise the online sports betting tax rate from 9.5% to 20%.
Casino industry representatives have voiced strong support for the measure, arguing that Indiana residents are already accessing online gambling through unregulated and illegal platforms.
Industry advocates pointed out that some illicit operators falsely advertise their services as legal, even using Indiana’s official seal to mislead consumers.
Supporters emphasised that legalising iGaming would introduce oversight, consumer protections, and significant tax revenue.
However, responsible gaming advocates warned about the potential risks associated with increased access to online gambling.
They argued, without substantive data, that online platforms allow for instant, anonymous transactions, which could lead to higher rates of addiction.
Some experts cautioned that online gambling is significantly more addictive than traditional forms of wagering and could contribute to financial distress, crime, and even suicide.
A provision in the bill would establish a new program focused on responsible gambling and addiction treatment.
Unlike past efforts that primarily promoted awareness, this initiative would allocate funds for treatment and research into gambling disorders.
Proposed tax structure and licensing
Under the current version of the bill, iGaming operators would be taxed at a rate of 26% through July 2026. After that period, a graduated tax structure would take effect, ranging from 22% to 30% based on revenue levels.
Only existing casinos and horse tracks would be eligible to apply for iGaming licenses.
The Indiana Gaming Commission would be authorised to begin accepting applications for licences as soon as the bill is passed, with online gaming expected to launch statewide on 1 September 2025.
To support responsible gambling efforts, licensed operators would be required to contribute annual fees of $250,000 to a problem gambling fund.
If additional funding is needed, the commission could require further contributions based on market share, with a cap of $2m per operator per year.
Hoosier Lottery supports online sales
Indiana’s Hoosier Lottery has also backed the legislation, arguing that an online lottery would help sustain revenue and attract new players. Indiana would join 14 other states, including neighbouring Kentucky, Illinois, and Michigan, in offering online lottery games.
Since its inception, the Hoosier Lottery has contributed over $7.4bn to the state, supporting pensions, gasoline tax offsets, and other public initiatives. Officials believe that expanding into online sales would complement, rather than cannibalise, retail lottery sales.
As part of the proposed framework, the Hoosier Lottery would contribute $500,000 annually to the responsible gambling fund.
Additional provisions in the bill include increasing revenue-sharing with local communities, enhancing voluntary exclusion programmes for problem gamblers, and partnering with an Indiana university to conduct gambling-related research.
The committee’s vote advanced the bill to the full House, with both Democratic and Republican lawmakers supporting the measure.