The decision by Ohio voters to approve four casinos has Indiana legislators rattled.  Competition from Ohio could have as much as a $100 million tax hit on Indiana’s bottom line.  Sunday’s editorial in the Indy Star makes the case for doing nothing, rather than continue to expand gaming and outrun the state’s competitors.

State leaders soon will have to make a critical decision about Indiana’s joined-at-the-wallet relationship with casinos.

Start to back away from the table now that Ohio has upped the ante? Or bet even more of the state’s future on additional casinos, flashier gambling halls and hefty tax breaks for the national corporations that lure gullible Hoosiers to their slot machines?

Ohio’s electorate on Tuesday voted to legalize casinos in their state (a choice, by the way, that Indiana voters never had the opportunity to make). The fallout for Indiana could be devastating, at least to state and local budgets that are propped up by gambling dollars.

It’s expected to take more than two years for land-based casinos to open in Ohio. That gives Indiana time to carefully consider its next moves.

Every gambler faces a critical choice at some point in a game: Stay in, and risk more losses; or walk away, and save what’s left. Indiana needs to give strong consideration to walking. — Indianapolis Star

It’s worth asking what $100 million means in today’s state budget.  Under current circumstances, the state is shedding about $100 million in tax revenue every five weeks.  Governor Daniels made it clear in his media availability on Friday that he does not support an expansion of gambling, but is willing to consider changes within current limits by moving licenses.  Expect to see proposals that go far beyond that this legislative session.

There seems to be a point of diminishing returns with any expansion of gambling.  The fact that there is concern over Ohio casino competition suggests that expanding gaming in Indiana could be a zero-sum strategy.  When Ohio wins, Indiana loses because there is a finite number of people in Southeastern Indiana who are willing to part so easily with their hard-earned money.  Actions by Ohio voters haven’t increased the size of the gaming public, it just moves it around a bit.  To make up for the $100 million lost, we would have to add far more capacity than Ohio is creating.

As the Star editorial suggests, it’s time to walk away.  No tax breaks, no bailouts, no expansions that push tough spending decisions to another day.  The Ohio situation is what it is.  Time to move on.