Indiana Sees Revenue Surplus In November, Sports Betting Profits On The Rise

By Emily Ketterer
TheStatehouseFile.com

INDIANAPOLIS –– Indiana continues to bring in more money than expected each month so far this fiscal year, including more than $880,000 in November sports wagering tax revenue.

The state’s general fund revenue for November reached a little more than $1.1 billion, which is $53.6 million above the adjusted revenue forecast presented in April. 

State Budget Director Zachary Jackson said the extra money comes from a number of factors and no particular outlier. He said the economy is good right now and the state’s three major sources of revenue––sales tax, personal income and corporate income––are all doing better than expected so far.

“The revenue forecast is just that, it’s a forecast, and therefore, fluctuations are typical and anticipated,” Jackson said. The fiscal year ends June 30.

In addition, sports wagering in the state just finished its third month at the end of November. Hoosiers placed nearly $150 million in sports bets during the month, an increase from the $91.7 million in bets placed during October. 

Those bets resulted in more than $880,000 in tax revenue for the state. And $9.3 million was collected in taxable adjusted gross revenue, according to the state report. Jackson said the tax revenue is an increase from the estimated $0.6 million expected in November.

Since legal sports wagering went live for the first time in September, more than $270 million in bets were made, which made the state $2.7 million in total tax revenue.

And Frank Ignatius, president and founder of BetIndiana, said the state can expect those revenue numbers to get even higher in the near future.

“This is probably one of the lower Novembers we will ever have,” Ignatius said. “This industry is still very much in its infancy, and I think there’s a lot of room for growth.”

He said researchers predict Indiana sports wagering will be worth about $300 million per year in revenue, which translates to about $30 million in annual tax revenue. 

Also, 65% of all sports wagering in November came from mobile bets. Ignatius expects at least 90% of bets to be mobile within the coming months.

To see how the state stacked up against others, Ignatius compared Indiana to New Jersey, which is in its 16th  month of legal sports wagering. New Jersey just broke the record for the total handle at $560 million collected in November. He said he sees this as a prediction for Indiana’s future in sports wagering. 

“They’re a much more mature market than Indiana,” Ignatius said. “But the point is, compared to the research numbers, New Jersey is surpassing what even the researchers suggested.”

He said Indiana is off to a great start.

“I mean their numbers have been better than most states in early months,” Ignatius said. “This is very encouraging for the future of Indiana sports betting. I think it’s going to be one of the top markets in the country.”

Although revenue coming in from sports wagering is exceeding forecasts, Jackson said the money only puts a small dent in the total revenue collected from state taxes.

“Given that we have collected over $6.26 billion in general fund revenues so far this fiscal year, the revenue impact of sports wagering, whether looking at the projections or actuals, is comparatively small,” Jackson said.

The updated revenue forecast for this fiscal year will be presented on Friday.

Indiana ended the last fiscal year with a record-high $2.27 billion in reserves, and the state continues to bring in money exceeding the revenue forecast. In July, Gov. Eric Holcomb asked that $300 million of that extra money be used for one-time capital projects already approved by the General Assembly:

• $73 million, Purdue College of Veterinary Medicine teaching hospital;
• $60 million for the Ball State University STEM and Health Professions facilities;
• $50 million, Fall Creek Pavilion at the Indiana State Fairgrounds; and 
• $30 million for the Ivy Tech Columbus main building replacement.

Holcomb will also ask the General Assembly to use funds for existing projects, including $48 million for the University of Southern Indiana Health Professions classroom renovation, and paying off existing debt obligations early for state facilities such as hospitals, prisons, and parks.

The governor has said paying for these projects now will save the state more than $125 million.

However, the Indiana State Teachers Association asked for $75 million to go to teacher salary raises. Holcomb did not set aside any reserve money to go toward this request. 

Democratic candidate for governor, Sen. Eddie Melton of Gary, who has been an advocate for teacher pay raises during his campaign, announced a bill that would take $100 million over the biennium for teacher pay increases.

“This would put money in teachers’ pockets next year, something Republicans have said isn’t possible,” Melton said. “I assure you, if it’s a priority, it can be done.”

FOOTNOTE: Emily Ketterer is a reporter for TheStatehouseFile.com, a news website powered by Franklin College journalism students.