Indiana: The good, the bad, the ‘meh’; Vegas: What’s that smell?

January casino revenues from Indiana present a conundrum. Although the state is still the most lucrative casino jurisdiction in the Midwest ($192 million last month), it’s hard to tell whether the half-full glass is filling or emptying. Foot traffic was down 12% but players’ spending rose 7.5%. The two didn’t quite cancel each other out, as Indiana finished the month down 6% from last year. So we’ve gone from more players spending less — the longtime quandary in Illinois — to fewer players spending more. I’m not sure which is preferable although I think new tax rates mean last month’s Indiana results are a harbinger of things to come. Which is one of the key reasons that I believe prophecies of recovery in the gaming sector are more akin to wishful thinking. As Richard H. Thaler, an economics boffin at the University of Chicago says, “I wouldn’t expect [tax increases] to have much of an effect on BMW consumption.”

“It’s almost a zero-sum game whenever a new casino opens,” adds Fitch Ratings analyst Alex Bumazhny, which means Indiana’s three-year streak of declining tax revenues from casinos is unlikely to be broken in 2013. So there’s not only little relief in sight for the Hoosier State, its southern riverboats have to brace for the impact of oncoming Horseshoe Cincinnati (right). The latter is expected to hit Penn National Gaming‘s Hollywood Lawrenceburg (-15% last month) hard, but the worst casualty is the Grand Victoria riverboat, a few miles downriver. At $6.3 million last month (-1%), it was one of the state’s two lowest-grossing casinos (Majestic Star II, -9%, was the other). Loss of traffic from Ohio could easily prove fatal. But if Grand Victoria is in critical condition, one needn’t worry about Horseshoe Southern Indiana*, up 11% as it feasts upon the Louisville market and the continued inability of Kentucky to legalize casinos or even racinos.

* (A wonderful J.P. Morgan typo re-christens the riverboat “Hoseshoe SI”)

Caesars Entertainment took a gut punch in the Chicagoland market, where Horseshoe Hammond‘s revenues fell 15%. (Rule of thumb: The highest-grossing casinos in the state should not be be the ones posting the largest revenue fluctuations.) Ameristar East Chicago, by contrast, was on a relatively even keel (-1%). While revenues on the Illinois side of the Chicago market have stabilized, January was a grim month for all other operators, dragged down by poor results in Hammond and aboard the two Majestic Star vessels. Besides Ameristar and “Hoseshoe SI,” those in the Doing Just Fine category were racinos Hoosier Park (+1.5%) and Indiana Live (flat), along with former whipping boy French Lick Casino (-2%). Casino industry spokespeople will kill me for saying this but 2013 looks to be a long grind. If Americans can’t afford to fill their car tanks, they can’t very well gamble at the casino to which they would have driven.

Another bites the dust. Although Mississippi has been one of the best casino markets in America, it boasts one of the most benighted political establishments. So it’s no surprise that an online-gambling bill didn’t make it out of committee. Score another Pyhrric victory for the prudes.

If you’re coming to Vegas, or even Laughlin or Mesquite, prepare to hold your nose. Spineless Clark County commissioners have agreed to let garbage monopolist Republic Services [sic] cut trash collections by 50%. And you thought the dumpsters were already overflowing! Summers should be especially pleasant, as flies swarm in abundance around rotting food and disposable diapers, festering in triple-digit heat.