For almost 20 years now, Indiana's gaming industry has been a key generator of tax revenue for this state. Since the opening of the state's first riverboat casino in 1995, the industry has been responsible for $10 billion in tax payments to state and local governments. What's more, gaming has led to the creation of thousands of Hoosier jobs, economic investment in some areas of our state that needed it most and the establishment of top-notch tourism destinations that have transformed communities and brought countless new visitors to Indiana.

But now, competition from surrounding states is threatening the success of our gaming industry. Of Indiana's 13 casinos, 10 are located along state lines. While this means they benefit from both in- and out-of-state visitors, it also means neighboring competition has a serious effect on their operations.

Michigan, Ohio, Illinois and Kentucky are all ramping up their gaming industries, and Indiana casinos are feeling the impact. With the opening of several new casinos in Ohio, Southeast Indiana casinos are expected to experience losses between $73.2 million and $93.9 million. Similarly, new developments in Kentucky are projected to result in $130 million annual losses to casinos in Southern Indiana. The same goes for gaming facilities up north.

These losses directly translate to a significant drop in state revenue that funds education, road maintenance and countless local services. Casino taxes are the fourth largest revenue source for our state. The amount Indiana expects to receive from riverboat wagering in the current fiscal year is down 15 percent from 2007, and experts predict another 9 percent drop in 2013.

This will certainly have an impact on Indiana's current and future budget. If we don't take steps to put our casinos back on a level playing field with their competitors, Indiana will have to deal with the consequences of this hit to the state's pocketbook.

Decades-old restrictions and tax mechanisms are placing burdens on Indiana gaming, creating huge obstacles for us to compete with neighboring states. These current regulations were put in place to maximize state revenue while allowing casinos to run their businesses and create Hoosier jobs. It has been a good model for nearly two decades, but the environment in which our state casinos operate has changed. As other states modernize, it's becoming cheaper to go to their gaming facilities and our casinos are losing business.

That's why I've authored a bill this session to help Indiana's casinos respond to these changes. The proposed bill gives our state's gaming industry more flexibility and strategic financial incentives to help it compete with other states. In its current form, the bill would enable riverboat casinos to create land-based facilities on their current property, permit table gaming at racinos and make changes to the gaming tax structure, including allowing the state to tax revenue instead of admissions.

These changes better match what other states are doing to protect their gaming-generated revenue, and will help make sure our casinos aren't losing patrons to out-of-state competitors.

This bill is not about expanding gaming. We will continue to protect the integrity of our state by ensuring gaming facilities operate under the highest ethical standards. This bill is entirely about promoting economic development and protecting our state interest in the industry. If we do nothing, we stand to lose upwards of $47 million just this year.

My colleagues and I have spent a great deal of time working on this bill, seeking input from those affected locally and making revisions as different concerns were brought to our attention. I'm confident the proposed changes will bring more people back to our gaming facilities instead of those in neighboring states, offsetting projected state and local revenue losses. The bill recently passed the full Senate and now moves to the House of Representatives for further consideration.

It's no secret Indiana's gaming industry faces long-term challenges. But I believe the General Assembly can pass a bill this session that enables casinos to effectively respond to changing market conditions while protecting the vital state revenues that this industry has always generated.

Phil Boots is a State Senator who represents Montgomery County. He is also an owner of The Paper of Montgomery County.