The Illinois Commission on Government Forecasting and Accountability recently released a report showing video gambling revenue has increased more than 75 percent in the past three years. Video gambling net income reached $1.4 billion in the fiscal year that ended on June 30, earning $70 million in tax revenue for local governments.
Although the games are prohibited in Chicago, the report said about 11,000 video gambling machines operate in the metro area, equivalent to adding nine casinos.
The success of video gambling has helped offset the “relatively stagnant performances” of the lottery, horseracing and riverboat gambling, the report said. Riverboat casino revenue fell by more than 15 percent since video gambling machines were introduced in 2012.
The report also said sports betting, daily fantasy sports and online gambling would need to appeal to new consumers to impact the state’s earnings. The report noted, “The state could have a large expansion of gambling, but yet have little new tax revenues to show for it.”
But expansion of gambling is on the table as lawmakers consider allowing up to five more casinos in Illinois, plus online and sports betting. The situation concerns casino lobbyist Malcolm Chester, an alderman in Des Plaines where Rivers Casino is located. “The tea leaves are not lining up in a very good way. It’s a very perilous situation,” he said. Legislators vowed when Rivers opened in 2011 that it would be the 10th and last casino to operate in Illinois.
Chester cited Churchill Downs Inc.’s proposal to buy a majority stake in Rivers Casino for up to $500 million. He said Churchill Downs owners are not satisfied with only offering slot machines at Arlington racetrack in Arlington International Racecourse in Arlington Heights, Illinois. “They want to transition. I think it’s likely. No question about that. Then there’s the issue of whether horseracing will survive at all. Racetracks are expensive to operate.”
Chester noted Rivers annually generates more than $400 million in adjusted gross revenue. After host city Des Plaines pays the state $10 million a year and more than $1 million to 10 South suburbs, it has $8-$9 million left, allowing it to not raise property taxes in seven years. The city has not allowed video gaming at local bars and restaurants out of concern it would impact business at Rivers.
Chester also said it’s possible new gaming operations will open in Lake County and at the shuttered Maywood Park racetrack. “Chicago is the key,” he said, because that city wants to own and operate its own casino and pay less in casino taxes than Illinois’ other casinos. A lot will depend on the results of Chicago’s mayoral election in early 2019, Chester said.
