Stirring the Hornet's Nest

Indiana lottery officials look to fold illegal gambling; will investigate truckstops, c-stores

Published in CSP Daily News

INDIANAPOLIS -- Faced with declining revenue, state lottery officials are assessing the extent of illegal gambling at Indiana's truckstops and convenience storesbusinesses where illegal devices often compete with lottery tickets sold only a few feet away, reported the Associated Press.

Starting this year at Governor Mitch Daniels' urging, Indiana's excise police began raiding taverns and fraternal clubs, seizing cash and yanking circuit boards from the video-gambling machines and other devices. Excise police have shut down more than 500 machines and [image-nocss] seized $30,000 in cash, but their jurisdiction does not extend to truckstops and c-stores where no alcohol is sold.

Hoosier Lottery Executive Director Esther Schneider intends to order a count of lottery retailers to get a clearer picture of how many of them have illegal gambling devices.

Schneider, who was appointed the lottery chief by Daniels in January, said she is trying to gather more information about ways the lottery can continue to raise revenue for the state and act to prevent illegal gambling.

"I know a lot of retailers use [them] for supplemental income," Schneider said. "It's a hornet's nest that I really don't want to stir until I have some answers and some solutions."

The Courier-Journal of Louisville, Ky., conducted a spot check of businesses along a portion of I-65 last Thursday and found that each exit with at least one truckstop had illegal gambling devices. The newspaper found six locations with a total of 20 electronic machines, plus six illegal "quarter-push" games that allow players to drop quarters into display cases in an attempt to win back the coin and more.

The Hoosier Lottery does not keep records on the number of illegal gambling machines at its more than 2,000 retailers. As a result, it finds itself under increasing pressure to address the presence of illegal machines at its retail locations.

In fiscal 2004 the lottery generated nearly $200 million in revenue, paying out $436 million in prizes. But its income is expected to drop about 5% when final figures for 2005 are compiled.

Other states, such as Oregon and West Virginia, control and monitor the video-gambling industry.

Hoosier prosecutors seldom file criminal charges involving gambling. They have said they would rather target more serious offenses. And juries are increasingly reluctant to convict a bar owner or a bookie for illegal gambling when state-sponsored casino gambling is thriving.

Schneider said she and other lottery executives considered sending letters to retailers, warning that their licenses could be revoked if they refused to remove the machines. But they opted for more research before acting.