The Illinois legislative session has ended without a gambling expansion bill—despite Governor Pat Quinn’s announcement that he wanted a bill and Chicago Mayor Rahm Emanuel’s lobbying for a Chicago casino to be owned by the city and operate independently of the Illinois Gaming Board.
State Rep. Robert Rita, the chief sponsor of the legislation in the House, said, “I’m going to ask for meetings with the administration of Governor Quinn and the administration of Mayor Emanuel. I want to hear what they have to say about the bill and what they would like to see.”
Gambling expansion previously had passed the Senate and House twice, so hopes were high once again. But Rita held public hearings in response to both opponents and supporters of the measure who said their voices had not been heard. He did not call for a vote on the measure.
In fact, as the session was winding down, he added two amendments. One would create a state-owned mega-casino in Chicago. Rita said this concept answered Quinn’s concerns about a city casino being independent of the state gaming board, plus overexpansion of gambling in Illinois. Rita’s second amendment would create a smaller state-owned casino in Chicago and four others throughout Illinois, including one in the south suburbs. Horse racetracks would get about 600 slot machines but only half as many as in previous bills.
Neither Quinn nor Emanuel responded to Rita’s amendments, but Rita said he reach out to them this summer. “Chicago is going to be part of the mix if we’re going to move forward,” Rita said.
The Senate, which twice passed casino bills, did nothing in regard to expanded gambling this session. Also showing no interest in new casinos are the operators of the state’s 10 existing casinos who said they already are losing revenue from video gaming machines at bars, restaurants and clubs, which were legalized last year. Also, a spokesman for Bruce Rauner, the Republican candidate for governor, said in a statement: “Bruce believes this is primarily a local issue that is about local control and what the community wants—and that’s who should be driving the decisions.”
Rita said a significant obstacle was the inability to write a bill that both Fairmount Park in Collinsville, the Casino Queen in East St. Louis and the city of East St. Louis would accept. Fairmount wanted a bill that would permit slot machines, allowing the track to use the revenue to boost purses, which it said are not competitive with purses at racinos in other states. The Casino Queen and the city of East St. Louis, which gets 40 percent of its revenue from Casino Queen taxes, said they would suffer financially if slots were allowed at Fairmount. Distribution of the local share of taxes from Fairmount slots also was an issue. As a result, Fairmount was temporarily cut out of the bill.
The elephant in the room is the 5 percent state income tax, which, unless it’s made permanent, will force the state to slash billions of dollars from education and other essential programs. And in Chicago, Emanuel has said the property tax must go up to fund city pensions. In addition, there are more than $4 billion in unpaid bills to the state. Casino expansion in Illinois could generate $500 million – $700 million in new annual revenue, according to the Commission on Government Forecasting and Accountability. A developer for a potential casino in Country Club Hills said he’s prepared to invest $200 million in a casino complex there. A Chicago casino would attract an investment of $1 billion.
Rita said, “I am disappointed we could not move this issue forward this spring, but I am determined to prepare a bill for consideration in the fall veto session. We will be considering important revenue and budget issues during that session. I believe gambling expansion should and will be a major factor as we make these critical decisions going into 2015.”
Rita added, “The public hearings we had this year produced important discussion on the challenges standing in the way of expansion. I plan to have more public hearings and meetings to further discuss these issues over the summer and fall. I want to put together a package that reflects the important role that horseracing tracks and casinos play in our economy and for our state budget. We need the horseracing industry and communities who want new casinos supporting this bill. My commitment is to find solutions for their issues, including restoring gaming positions at the racetracks and providing an agreement that allows slots at Fairmount Park in the Metro East. We should have a special opportunity to make our case for gambling expansion at the end of this year, and I want to do everything we can to take advantage of it.”
In addition to expanded gambling legislation, lawmakers may also consider tightening video gambling laws. Illinois Gaming Board Chairman Aaron Jaffe said too many “bad apples” are involved in the video gaming industry. He told industry insiders, “I think you have to get off your seats and complain about it. You ought to talk to the legislature about how this hurts your business, and you ought to do the things necessary to push back against these terrible people who are actually trying to ruin your business.”
Specifically, Jaffe wants to create a blacklist for the video poker industry, similar to one in Illinois for casinos and includes alleged gambling cheats, gang members and others with an “unsavory reputation.” The blacklist and other reforms backed by the gaming board were tossed out by Illinois lawmakers. Currently more than 17,000 legal video gambling machines are take in tens of millions of dollars a month at more than 4,000 locations across Illinois.
The legislature also did not pass a proposal to ban so-called sweepstakes machines and coupon kiosks in communities that opted out of legalized video gambling, including Chicago. Opponents said loopholes in the law are allowing these machines and kiosks to sidestep regulation.
Jaffe slammed lawmakers for allowing gambling interests to have an influence on legislation. He urged support for a ban on political contributions from the industry, which Quinn has supported in the past.
Also in Illinois, which was the first state in the U.S. to offer online lottery ticket sales, lottery officials said online sales have generated $36.9 million since the program debuted two years ago.
The lottery uses geolocation to confirm purchasers are physically in Illinois. In addition, age and identity verification systems utilize the same technologies used by regulated online gambling sites. Also, purchases may be restricted to $150 per day.
Illinois Lottery director Michael Jones said, “The Lottery, through its private manager, launched the first internet sales portal in the United States during the $656 million Mega Millions jackpot week of March 2012. Two years later, it is clear that the age and geography constraints that were key parts of the test are working as designed.”
