Committee Approves Indiana iGaming Bill, Amendment to Raise Online Sports Betting Taxes

Legalized Indiana iGaming took a big step forward today.
Members of the House of Representatives Public Policy Committee approved HB 1432, a bill to legalize iGaming, by a vote of 9-2-2. The committee members also approved an amendment to the bill to raise the state’s online sports betting tax rate from 9.5% to 20%.
The bill now heads to the House Ways and Means Committee. If eventually signed into law, operators will be able to launch US online casinos in the Hoosier State by Sept. 1, 2025.
Revamped Problem Gaming Fund
The bill, if approved, will legalize iGaming and iLottery services.
Rep. Ethan Manning (R-23), author of HB 1432 and chair of the policy committee, explained that under the legislation the Indiana Gaming Commission will develop and administer iGaming, while the Indiana Lottery Commission will regulate online lottery games. He introduced the iGaming bill earlier this month.
An amendment to the bill to increase the state’s online sports betting tax to 20% was also unanimously approved by the committee. The state’s retail sports betting tax rate, however, will remain at a flat 9.5%.
The legislation, he noted, will also revamp the state’s problem gaming fund. Under the new law, each of the state’s 13 licensed casinos will contribute a minimum of $250,000 annually to the fund and the state lottery will contribute $500,000. These funds will be used to cover problem gaming services, treatments for addiction, and other programs as noted by the gaming commission.
Any additional revenue needed to fund problem gaming services will be paid out by the casinos based on market share, Manning said. The additional costs will be capped at $2 million annually per casino.
Rep. Matt Lehman (R-79), one of two representatives to cast a no vote, explain his reasoning during the hearing. Despite the increases to the problem gaming fund, Lehman said he would be a “quiet no” on the bill for fear that it could increase gambling access for underage residents.
The new form of gambling is “fine for a 45-year-old with the means to do so,” but not for someone underage in the state, he said.
iGaming Happening Right Now in Indiana
Indiana residents are participating in iGaming in the state right now whether people want to believe it or not, Manning told the committee. They are participating in an unregulated iGaming market with offshore operators, depriving Indiana of tax revenues and necessary consumer protections.
“This is happening already in Indiana. Let’s authorize it, regulate it, and let’s make it appropriate. We see huge potential for tax revenue as well,” he said.
Jeremy Kudon, president of the Sports Betting Alliance, described the approved as “a huge step forward” for regulated gaming in the state.
“This enthusiastic vote is a huge step forward for regulated iGaming in Indiana. As many discussed at today’s hearing, iGaming is already happening across the state – just through unregulated platforms that dodge consumer protection laws and advertise to minors. Indiana can follow the lead of Michigan and Pennsylvania by creating a transparent, regulated marketplace with real, legally enforceable consumer protections – all while generating real revenue to help the state solve problems,” he said.
Bill Details
If approved, the bill actually provides a launch date for operators, which is a rarity. iGaming will be eligible to begin in the state on Sept. 1, 2025.
According to the legislation, the following will be eligible for an iGaming license:
- A licensed owner of a riverboat
- An operating agent operating a riverboat in a historic hotel district
- A permit holder conducting gambling games at the permit holder’s racetrack
Indiana currently has 13 commercial casinos, as well as one tribal casino, and two racetracks that offer racinos.
The bill’s initial iGaming tax rate would be set at 26% of adjusted gross revenues. This rate would expire on July 1, 2026, and a new tiered iGaming tax rate would follow. The tiered rates would be based on annual adjusted gross revenues as follows for licensed operators:
- 22% of adjusted gross iGaming revenues if an annual total is less than $4 million
- 24% of adjusted gross iGaming revenues for $4 million or more but less than $8 million
- 26% of adjusted gross iGaming revenues for $8 million or more but less than $10 million
- 28% of adjusted gross iGaming revenues for $10 million or more but less than $12 million
- 30% of adjusted gross iGaming revenues for $12 million or more
The bill sets an iGaming license fee at $500,000, which must be renewed annually for $50,000.
Online Lottery Also Included
The bill also allows for the legalization of online lottery games in Indiana. If approved, the bill will allow for the sale of draw games and eInstant games over the internet.
The bill also provides that the Indiana Lottery Commission may authorize and regulate courier services, including for the delivery of draw games and eInstant games over the internet.

Robert Linnehan
Covering regulatory developments in online gambling. Editing/writing/creating a newsletter for readers across all formats.