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BY SUSAN ERLER
serler@nwitimes.com
219.462.5151 | Sunday, April 03, 2005 | (No comments posted.)
HAMMOND | Renewed lawmaker interest in gambling revenues torpedoed plans for a multi-million hotel at Horseshoe Casino, Horseshoe General Manager Rick Mazer said.
A $220-million hotel was part of a larger, approximately $556 million Horseshoe improvement project Mazer had intended to propose to officials of the riverboat's owner, Harrah's Entertainment Inc., he said.
"I was one week away from presenting it to the capital projects committee," Mazer said.
That was before lawmakers in February began eyeing a bigger share of casino revenues as a source of state funding, Mazer said.
Proposals by State Rep. Earl Harris, a Democrat from East Chicago, and Republican State Rep. Jeff Espich, of Uniondale, sunk plans for the hotel, though neither measure survived the first half of the legislative session, Mazer said.
Harris's plan would have added $1 to the admission tax casinos pay the state, as a way to raise about $14 million for property tax relief and to fund lakefront development and the Regional Transportation Authority.
Espich had proposed a 1 percent increase in the top casino tax rate, to generate about $8 million a year to help fund a new Indianapolis Colts stadium.
With those measure pending, plans to improve Horseshoe ran aground, Mazer said.
"I can't stand before a board of directors and say we're in an environment that's business friendly," he said, especially when Harrah's Entertainment Inc., with gambling operations in 10 states, can pick and choose where to invest, Mazer said.
Espich this week said he can't answer for what Horseshoe's plans might have been.
"Obviously, they've been very successful to date," Espich said. "They've made a lot of money.
Horseshoe reported revenues of $42.8 million in February, a record for the boat.
The casino industry's claim that it can't afford a higher tax rate flies in the face of evidence other gaming venues would be willing to pay more than the 34 percent in taxes the state's 10 casinos pay on average, according to Espich.
The state's 10 casinos paid a combined $742 million in taxes in 2004.
Advocates of casino-style gambling at race tracks in Indiana were willing to pay up to 53 percent, and there have been proposals to legalize slot machines in bars and service clubs and tax them at a rate about 40 percent, Espich said.
"Obviously there is always a limit," Espich said. "Too much tax will discourage business."
"But when I hear that the boats are maxed out, I don't believe they're there yet," he said. "They're still very successful."
Mazer said he's still hopeful he can salvage pieces of the approximately $556 million project, which included renovations to the riverboat as well as restaurants, entertainment areas and the casino pavilion.
But the hotel itself, planned as a "all-suite facility, as nice as any hotel you've seen," is off the planning table, he said.
"I could've been very happy if (legislators) had just left us alone, kept us out of the mix, stopped using us," Mazer said. "There are only so many feathers in this goose."
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