An Illinois Senate committee is considering a massive expansion of riverboat casino gambling as part of a legislative package to break a state budget logjam.
The Illinois Senate Gaming Committee recently heard testimony on proposed legislation that would allow casinos in Chicago and five other locations and permit slot machines at horse racetracks. Licensing fees would help close the state’s budget gaps and other gaming revenue would go for education. In addition, revenue from the land-based Chicago casino would benefit the city’s police and fire pension accounts.
In the past, legislators approved similar gambling expansion measures but former Governor Pat Quinn vetoed them. Governor Bruce Rauner is open to more casinos, providing communities want them.
However, gambling opponents are concerned about public safety and social issues. Also, some analysts have started to say the Illinois gambling market is saturated because of the explosion of video poker, which, a recent report indicated, has not increased overall gambling revenue in the Chicago area. But most of the south and southwest suburbs that allow video gambling realized increases in tax revenue generated by the machines last year, according to Illinois Gaming Board figures.
Originally, the legislature’s Commission on Government Forecasting and Accountability stated in its annual “Wagering in Illinois” report that the number of new video gambling terminals being introduced each month has slowed. State gaming regulators expected the total number of gambling terminals around the state to plateau at around 20,000. Statewide, 24,841 video gambling terminals were operating at the end of last year, compared with 22,135 at the end of 2015, according to the gaming board. Revenue to the state last year was $277 million, compared with $228 million in 2015.
The total amount of money bettors put into the machines also rose last year. Statewide, customers of establishments that have the gambling terminals played $4.2 billion in 2016, compared with $3.4 billion in 2015. Gamblers lost a total of $1.1 billion compared with $914 million in 2015.
In the 15 south and southwest suburbs that have the largest number of video devices, customers of bars, restaurants, truck stops and veterans and fraternal organizations spent a combined $251 million at the machines last year, losing just under $65 million, according to the gaming board. In those same 15 communities in 2015, players put $200 million into the machines and lost $53.3 million.
The Commission on Government Forecasting and Accountability report also noted video gambling has had a negative impact on revenues at the state’s casinos, particularly in the Chicago area. “The numbers suggest that adding video gaming to the Chicago area has merely redistributed the revenues to the numerous gaming venues that now exist in that area,” the commission wrote.
Adjusted gross receipts at the five metro Chicago area casinos dropped by a combined 9.3 percent between fiscal years 2012 and 2016; video gambling “no doubt has been a significant contributor” to the decrease, according to the report. The state’s indoor smoking ban and the recession also been cited as reasons for the decline in revenue. Still, the report said, video gambling may have helped to prevent Illinois gamblers from going to casinos in northwest Indiana.
The commission’s report also stated that “value of a new casino in Illinois has no doubt weakened” because of the proliferation of video gambling machines.” It noted casinos are limited to a maximum of 1,200 gaming positions; but the addition of thousands of video gambling machines in the Chicago area since the fall of 2012 (the city of Chicago prohibits the devices) is comparable to opening about seven casinos in the metro area.
The availability of video gambling options in the suburbs “has diminished the revenue potential” of a Chicago-based casino.
