The Indiana House of Representatives has passed a bill that would allow up to 5,000 slot machines at Indiana horse racing tracks, a proposal supporters say would boost the racing industry and bring the state millions of dollars in tax money.

The legislation, which passed 54-39, would allow each of the state’s two racetracks to pay a $100 million fee to install up to 2,500 slot machines. The money the machines bring would be taxed at a rate of 37.5%.

Thirty-five percent of the tax revenue would be distributed to Indiana counties without racetracks or riverboat casinos. Five percent of the tax revenue from Madison County’s racetrack would go to county and local governments there, while 5% of the taxes from Shelby County’s track would be distributed there. The rest of the tax revenue would go to the state’s main account.

The tracks and horse racing industry, starting in 2009, would give up the $27 million a year in subsidies they currently share from riverboat gambling revenue. That money would instead be funneled into a health care fund that is not specifically outlined in the legislation.

The bill also would give tax breaks to the new French Lick casino, which some worried would face competition from the slot machines at racetracks. The tax breaks will last for five years while the casino gets its feet on the ground, said bill sponsor Rep. Trent Van Haaften, D-Mount Vernon.

Supporters said slot machines would breathe life into the struggling racetracks at Hoosier Park in Anderson and Indiana Downs Shelbyville, while providing the state with much-needed revenue.

Rep. Eric Gutwein, R-Rensselaer, said the horse-racing industry provides thousands of jobs across the state.

“Those jobs are truly at risk without the passage of this legislation,” he said. But Rep. Chet Dobis, D-Merrillville, said the state should not bail out the failing horse-racing industry.

“It’s a loser in every racetrack in this country,” he said.

The bill now moves to the Senate for consideration.
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