Posted By: John Steele

Thu Nov 9, 10:42 PM ET

In a southern Indiana town, a bar owner has a small, locked room with five video slot machines. He knows he's breaking the law -- the machines are illegal in the state -- but he lets people play so he can supplement his income.
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One machine, he said, can turn a profit of $500 to $3,000 a week. His customers come from all walks of life.

"I've got factory workers. I've got guys that own their own businesses. I've got city councilmen that come in and play them," said the bar owner, whose name 6News did not reveal.

Indiana allows gambling on riverboats -- the state has 11 such casinos -- and at horse tracks. The state also has a lottery. Other forms of gambling, however, are illegal.

The Indiana Licensed Beverage Association is pushing for legalization of video gambling, saying 20,000 machines like the southern Indiana bar owner's are already in use statewide.

If the state were to legalize them, it could tax them. That, the ILBA says, would give a $300 million yearly boost to the state.

"We're not talking about huge high-stakes gambling here," the ILBA's Brad Klopfenstein told 6News' Jeremy Brilliant. "When we talk about legalizing these, we're talking about dropping quarters into a machine."

Louisiana Has Been Down Indiana's Path

Louisiana has tried what some in Indiana are considering. It legalized video gambling in 1990. Now, betting in New Orleans is as simple as walking into a corner bar.

Last year, Louisiana made more than $200 million in video-poker taxes.

As nice as the revenue is, Louisiana Gov. Kathleen Blanco told 6News that she doesn't want to expand gaming in the state. She said she wants to strike a balance.

"That is its proper perspective -- as one of our entertainment opportunities, but not as the only economic driver in this state," Blanco said.

Indiana's Governor Could Be Open To Legalization

Indiana Gov. Mitch Daniels has said he won't introduce a bill to legalize video gambling, but he isn't necessarily against legalization.

"The answer is maybe, if it was tightly regulated," Daniels said.

In the meantime, he wants the current laws enforced. Hoosiers with video gambling machines run the risk of prosecution.

In September, authorities seized more than 20 bars and restaurants in Madison, Delaware and Henry counties on suspicion the businesses were linked to an illegal gambling operation.

Twenty-nine people, including former state Teamsters boss John L. Neal, were booked into the Madison County Jail in connection with the case.

Investigators said they believed Neal, 69, owned video poker machines that were distributed to the businesses. They said Neal owned the bars and restaurants but sold them on contract to other people. His case is pending in court.

Dave Heath, who runs state excise police and is the chairman of the Indiana Alcohol and Tobacco Commission, dismisses any argument that because many video gambling machines are already in use and because some forms of gambling is legal, the video machines should be legalized.

"There are a lot of legal drugs. Just because people are using illegal drugs doesn't mean we legalize the illegal drugs," Heath said.

In the meantime, the games go on for the southern Indiana bar owner with the five video slot machines.

"I'm just trying to run a business and make a profit and pay my bills," he said.

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