Four Winds South Bend opens today; expected to shake up Indiana gaming industry

Indiana’s first Native American owned and operated casino, Four Winds South Bend, opens to the public today at 4pm EST. The Pokagon Band of Potawatomi Indian’s latest gaming venture is located at 3300 Prairie Road in South Bend and joins Four Winds locations in Michigan including Hartford, New Buffalo and Dowagiac.

The major difference between the four casinos besides being in two different states is that Four Winds South Bend is a Class II gaming facility unlike the Pokagon Band Tribe’s three venues in Michigan which all operate under Class III licenses. That means – for now –  the South Bend location will not have tables games or traditional slot machines.

Class II gaming encompasses bingo and games associated with it, such as pull-tabs and non–banked card games, which are games played exclusively against other players rather than against the house or a player acting as a bank. Class III gaming or casino-style gaming as it’s commonly referred to, includes everything else and banked-card games. While Class II and Class III machines look similar, the former aren’t really slot machines at all, but instead are electronic bingo machines.

Director of technology at the National Indian Gaming Commission, Travis Waldo, says, “In a Class II, you’ll typically see more consistent wins and more consistent payouts, but jackpots are a little smaller. People tend to like that Class II a lot better,” according to the South Bend Tribune.

Class III are generally considered the more lucrative with the addition of slots, horse racing, lotteries and banked-card games like baccarat and blackjack 7BALL , roulette and craps. Another Class II and Class III distinction is that only the latter have had to negotiate a gaming compact with the state, agreeing to share a portion of gambling revenues.

The Pokagon Band tribe already has a compact in the state of Michigan and as such the tribe’s three casinos there are all Class III facilities and operate Vegas-style gambling. The compact also means the tribe must pay a percentage of its slot revenues; in this case eight percent, according to the Spectrum Gaming Group’s 2016 study (pdf) on behalf of the Indiana Casino Association, as reported by the South Bend Tribune.

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While the Indian Gaming Regulatory Act gives tribal communities the ability to open casinos on sovereign land without state approval or taxation, as long as they operate a Class II gaming facility, tribes can still offer to provide revenue to local or state governments. The tribe may be lacking a compact with the state, but a sharing agreement with South Bend provides the city with two percent of the Four Winds South Bend casino’s annual revenue, which will go towards the city’s budget, as well as additional agreements to fund local projects and governments, according to the South Bend Tribune.

So while the Pokagon Band of Potawatomi Indians newest gaming venture is not subject to state corporate income taxes or Indiana wagering taxes, the state’s 13 commercial casinos are reportedly subject to graduated tax rates from between 15 percent and 40 percent of annual revenues, which the Indiana Gaming Commission collects in taxes; an advantage that could result in commercial competitors being outpaced by the tribal casino in annual profits.

Spectrum Gaming’s study also reportedly suggests that a Class II gaming facility could be almost as profitable as a Class III facility. According to data from the Indiana Gaming Commission, in 2016, 84.9 percent of gaming revenues came from slots.

The South Bend Tribune reports that Four Winds South Bend did not say if the odds at its new facility would be better than those at one of the state’s commercial casinos, but Spectrum Gaming’s study reportedly included that players of Class II games often have better odds because there are fewer taxes to pay.

An approximate 33-mile drive from the newly opened Four Winds South Bend, Blue Chip Casino located in Michigan City, could have some of its business cannibalized by the new competition, as was the case when Four Winds New Buffalo opened in 2007. According to the news agency, that first year, Blue Chip took an initial revenue hit of $50 million and has since been on a downward slope going from $267 million in 2007 to $159 million last year.

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Four Winds South Bend 175,000 square feet of gaming space features 1,800 of the latest games ranging from $.01 to $25, three restaurants, a 24-hour deli and a specialty coffee shop and gourmet market, three bars and a gift shop.