BY PATRICK GUINANE, Times of Northwest Indiana
pguinane@nwitimes.com
INDIANAPOLIS | With Indiana set to christen three new casinos this summer, state gambling regulators are doing their part to unfurl the red carpet for high rollers.
Indiana Gaming Commission staff members are putting the final touches on new rules designed to welcome junketeers, the industry equivalent of travel agents. Working on commission, they lure big-money players and group tours to casinos with offers of free show tickets, hotel discounts, or complimentary meals.
"We have a network of independent agents who currently send business to destinations such as Atlantic City, Lake Tahoe, New Orleans," said Jeffrey Hoss, vice president of national casino marketing for Harrah's.
"We go out, license them with the state and they in turn send us casino customers. Just as travel agent would get paid based on hotel room rate, we pay these independent agents based on casino volume."
Indiana had allowed junketeers for years, but none were willing to maneuver the state's steep regulatory hurdles, which included annual background checks and licensing fees of at least $5,000.
The Gaming Commission in late March voted to create a $250 annual registration charge for junketeers, plus a $75 fee per employee. Some lobbying from Harrah's helped convince Indiana regulators to stop holding junkeeters to the same strict licensing standards as companies that supply slot machines and playing cards and other casino essentials.
"It's something we've been working on for about a year," said Kevin Kline, assistant general manager of Horseshoe Casino in Hammond. "We are building a $500 million new casino, and the independent rep side of the gaming business, particularly as it relates to our company, is a very big source of revenue."
Annual revenues are down 3 percent at Indiana's 11 casinos, but the year-over-year decline is double that for the five Lake Michigan riverboats. Blue Chip Casino in Michigan City has seen its take plummet 29 percent since August, when Four Winds Casino opened 10 miles away in New Buffalo, Mich.
It was against that backdrop that state regulators decided to expand the breadth of Hoosier hospitality. The new application process for junketeers should be complete in a matter of weeks, said Jenny Arnold, the Gaming Commission's deputy director.
"It reviewing industry practices we determined that this a good way to generate high-net individuals," she said. "And certainly with our gaming facilities becoming more destination casinos, we thought it would be a good idea to create a better regulatory environment for junketeers."
Hoss, the Harrah's marketing honcho, said the company has a national network of 250 independent agents, including several eager to start work in Indiana. They'll have an edge in attracting Chicago tourists and convention goers across the state line, he said, because Illinois forces junketeers to get a $10,000 license and doesn't allow them to earn commissions based on casino profits.
Construction of a new 350,000-square-foot Horseshoe Casino in Hammond Marina is running ahead of its September completion target, and Harrah's now hopes to debut the new riverboat in late summer. By then, the network of junketeers should be in place to gin up excitement from the grand opening.
Two more new gaming destinations are set to open this summer at Hoosier Park in Anderson and Indiana Downs near Shelbyville. State lawmakers last year sold the downstate horse tracks $250 million licenses to open gambling parlors with up to 2,000 slot machines.