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Ind. lawmakers worry casino laws being bent
New projects look less like boats

By Lesley Stedman Weidenbener
lstedman@courier-journal.com
The Courier-Journal



INDIANAPOLIS — Concerned about new casinos that could be more like buildings than boats, several key legislators want to review whether state regulators are stretching what Indiana's gambling law allows.

House Speaker Pat Bauer, D-South Bend, said legislators will make changes if necessary to ensure the Indiana Gaming Commission can't authorize what Bauer says are essentially land-based casinos.

"They can't change the rules," Bauer said.

But Ernest Yelton, executive director of the gaming commission, said the concern is unnecessary.

Massive new vessels being built for Argosy Casino in Lawrenceburg and Horseshoe Hammond in Lake County will be navigable boats with motors and crews and can move on their own, he said.

Yelton said that means the casinos won't be so-called "barges," generally vessels without a motor and something the legislature has not authorized.

"I have repeated consistently that I have absolutely no intentions of letting the Indiana Gaming Commission approve barges," Yelton said.

But the building standards for casinos remain an issue.

For a decade, the Coast Guard certified all the state's casino vessels, ensuring they met marine codes.

But not long after the legislature allowed the boats to stop cruising, the Coast Guard stopped certifying permanently docked casinos in Indiana and elsewhere.

So the General Assembly passed a law in 2005 authorizing the commission to establish an alternate certification for the boats based on "marine structural and life safety standards determined by the commission."

The commission is now writing those standards.

Although a draft is not yet public, officials at Boyd Gaming Corp. are questioning what the standards contain. They point to artists' renderings of the $310 million Argosy and $480 million Horseshoe projects as evidence that the new casinos will not be boats, but barges.

The distinction, they say, is not simply having motors but whether the casinos are built to marine standards rather than land-based building standards. The difference can be enormous -- both in design and cost, said Tom McPherson, Boyd's vice president of government affairs.

Land-based building standards allow the use of more wood, different kinds of restaurant cooking equipment, open-air escalators and cheaper safety requirements, he said.

Yelton acknowledged the new casinos will be the biggest, most expensive built yet. But he said that doesn't mean they won't be boats. Still, he said there will be differences between the Coast Guard standards and those proposed by the commission.

"Our safety standards will be concentrating around a vessel that will be docked permanently," he said.

An example is how the casinos handle emergencies. The Coast Guard requires that a boat have a fireproof area where passengers can gather, but Yelton said a docked vessel should get customers on land quickly.

But Boyd Gaming officials say they spent millions of dollars establishing the fire zone on their new Blue Chip Casino in Michigan City. By eliminating the requirement, McPherson said, other casinos can spend more on gambling amenities, putting Blue Chip at a competitive disadvantage.

In all, he said, the casino spent $40 million on standards that might now be eliminated.

Horseshoe General Manager Rick Mazer said that's just bad luck. "Everybody takes a chance when you decide to do anything," he said.

Horseshoe and Argosy officials say they are confident their casinos will meet the new gaming commission standards -- even though the rules haven't been released and the boats are under construction.

Both the commission and the casinos are using the nonprofit American Bureau of Shipping Corp. as consultants.

"ABS is fully aware … of what we want the standards to be," Yelton said. " … We're not going to conform our standards to what Argosy and Horseshoe have done. We're going to conform our standards to what we think is correct."

Still, Senate Majority Caucus Chairman Jim Merritt, R-Indianapolis, said he's concerned because the new casino projects look different -- larger and more like buildings -- compared to current boats.

The General Assembly rejected Blue Chip's push for barge-based casinos before the company started construction of its boat, and the same rules should apply to the new casinos unless lawmakers act, Merritt said.

"I'm just a little concerned that these two pieces of construction are different than what the other boats are doing," he said.

Eric Schippers, vice president of public affairs for Argosy's parent company, Penn National Gaming, said the new casino will be navigable, although it's "not one we intend to take on cruises or excursions." But it will be much larger than existing boats, with gambling located largely on one level rather than several.

"It's a customer-oriented approach," Schippers said. "It will feel more similar to a land-based facility than to a traditional riverboat facility, which is a more stacked approach."

Horseshoe officials say they are confident their project will meet the new rules.

"We're spending millions and millions of dollars incorporating engines into this facility despite the fact we are dockside and won't cruise," said Mazer. "It will have the ability to be a self-propelled excursion vessel and we're spending millions of dollars to prove it."

Reporter Lesley Stedman Weidenbener can be reached at (317) 444-2780.