The Illinois House Executive Committee recently took up state Rep. Bob Rita’s two new expanded-gambling proposals under SB1739. One plan envisions a Chicago mega-casino with up to 10,000 gaming terminals. Revenue generated by a Chicago casino would be split evenly between the city and state. Rita said the Chicago-only option would “capture the revenue in the Chicago market without creating the cannibalization and oversaturation.”
Rita’s second plan calls for a Chicago casino with 4,000-6,000 gaming terminals, plus smaller 1,200-terminal casinos in southern Cook County, Lake County, Winnebago County and Vermilion County. The plan also would allow each racetrack in Cook County to have up to 600 slot machines and racetracks in other counties to have up to 450 slot machines.
Rita said in response to past criticism, the Chicago casino would be state-run in both plans. Illinois Gaming Board attorney Caleb Melamed told lawmakers, “There are certainly improvements. This is a significantly different piece of legislation than previous years.” Melamed also questioned whether the state should own the casino, noting current law requires a private operator that would be regulated by the state. In addition, he noted 10,000 gambling positions would make the Chicago casino the largest in the world. Rita responded the city could adjust the size of the operation.
Mayor Rahm Emanuel’s spokeswoman Sarah Hamilton said he would not address the casino issue before the city solved its pension problem. Illinois legislators approved a partial fix to Chicago’s pension issue, but it’s not certain if Governor Pat Quinn will sign it.
Rita said he wants the legislature to vote on the proposals before the end of May. He added he has not discussed the measures with Emanuel or Quinn, but that prospects look better this year than last year since Quinn signed into law a pension overhaul bill—a priority for Quinn. Lawmakers also are seeking additional revenue sources because a temporary$1.6 billion income tax increase scheduled to roll back January 1 could lead to major budget cuts. Supporters say gambling expansion would provide an estimated $400 million to $1 billion in annual revenue.
State Senator Dave Syverson, favoring Rita’s second plan and speaking for smaller cities hoping for a casino, said, “There’s a lot of individuals in Illinois that still leave Illinois to do gaming that could stay here. We either build a casino here or watch that money go over state lines. If the problems are going to exist anyways, we might as well get the benefits with those problems and that’s what a facility in Rockford would do.”
But opponents to Rita’s revised plans had plenty to say at the hearing. The social costs of gambling were mentioned by Chicago area pastors and anti-gambling groups. The Illinois Casino Gaming Association, which represents most of the state’s casinos, said it opposed both plans, and cited revenue drops and market saturation.
Lawmakers and mayors from central and southern Illinois said they will lobby against the Chicago-only proposal. State Rep. Chad Hays said, “The purpose was to help economically distressed communities. I would suggest that downstate taking the leftover crumbs from Chicago is a laughable assertion that no downstater would bite on.” Danville Mayor Scott Eisenhauer added, “The opportunity to add downstate job creation and revenue growth far outweighs the advantages of a Chicago only license.”
Officials from the state’s horseracing industry also oppose both of Rita’s measures. They said the Chicago-only casino does not help the industry and the second plan cuts in half the number of slots allowed at racetracks in previous legislation; past versions would have permitted up to 1,200 slot machines in Cook County racetracks, and 900 slots in other counties. Illinois Harness Horsemen’s Association President Dave McCaffrey told legislators his group would support expanded gambling if slot machine limits were restored to previously proposed levels.
Glenn Berman of the Illinois Thoroughbred Horsemen’s Association said the currently proposed limits are far less than what Indiana racetracks allow. “The limits in those states were thoughtfully negotiated for the benefit of all. We want the same thing from our governor,” he said.
And in Alton, “a business decision” recently prompted Argosy Alton to close one of its three gambling decks four days a week, said spokeswoman Jennifer Miglionico. Owned by Penn National Gaming, Argosy Alton, the smallest casino in the St. Louis gaming market, will remain fully open on Friday, Saturday and Sunday, she added.
The partial closure illustrates the general slowdown in regional markets. In March revenue at Argosy Alton dropped 16.2 percent to $5.5 million compared to March 2013, according to Illinois Gaming Board figures. Gambling revenue for the entire St. Louis market declined 7.6 percent to $92.7 million for the same period, according to the Missouri Gaming Commission.
