Tuesday, May 31, 2011

Lawmakers pass gaming expansion

By Lauren N. Johnson

Illinois may be getting five more casinos, and horse racing tracks in the state could soon begin installing slot machines under a proposal that lawmakers sent to the governor this evening.

Senate Bill 744 (amendments 1 through 7), sponsored by Democratic Sen. Terry Link of Waukegan and Rep. Lou Lang of Skokie, which passed with a narrow vote of 30-27 in the Senate, would allow new casinos in Chicago, Park City, Rockford, Danville and an unnamed south suburb of Chicago, along with video gaming at seven Illinois racetracks and additional gaming stations at existing casinos.

Private companies would own the five new casinos, with an exception for one in Chicago, which would be owned by the city of Chicago but operated by a private company. The Chicago casino would have 4,000 gaming positions, and the other four new casinos would start off with 1,600 gaming positions each.

“We need help for our horsemen, we need to help to save the industry of the horsemen, we need to help to save the racetracks. This legislation is going to do it,” Link yelled during floor debate in the Senate.

New and existing riverboats would be allowed to increase their gaming positions up to 1,600 and up to 2,000 after January 2013 and would also receive some tax breaks. If the legislation is signed by Gov. Pat Quinn, both sponsors hope the casinos will begin operating this year.

Link said the bill would raise at least $1.6 billion in “up-front” revenue from licensing fees, which would go toward tackling the state’s unpaid bills owed to vendors, service providers and schools. He said he expects additional tax revenues from the casinos to be $760 million to $1 billion annually for at least the next five years. “There may be a casino or a racino in one, or somebody’s area, but we all will benefit from it,” he said. Along with paying down overdue bills, the revenue would be spent on capital construction projects. Link said $32 million in initial revenue would be dedicated for foreclosure prevention, compulsive gambling programs, soil and water conservation, park districts, local and county fairs and agricultural interests downstate.

Although Link called the revenue estimates “conservative,” Tom Swoik, executive director of the Illinois Casino Gaming Association, called the $1.6 billion figure “unrealistic” and said that tax incentives for newer casinos could cause existing casinos to lose revenue. He said new casinos would cost the Grand Victoria Casino in Elgin 28 percent to 35 percent of it current revenues. He said the casino made $428 million in profits in 2007, but they dropped to $275 million in 2010.

Senate President John Cullerton of Chicago said the proposed locations for the new casinos outside of Chicago are close enough to Illinois' borders that they will draw gamblers in from other states instead of taking profits from Illinois' existing casinos. “It will keep people from going to other states to gamble. And it will bring and attract people from other states into our state to do what people want to do,” Cullerton said.

Robert Molaro, a former Illinois House member and current lobbyist for the horse racing industry and specifically the Hawthorne Racecourse in Cicero, said, “The tax breaks…will allow our existing river boats to market where they may not be able to market.” He said with additional revenue, riverboats would be able to gain and manage up to 2,000 positions. “The revenue estimates are definitely there,” Molaro said.

Members of the horse racing industry say that casino owners and operators need tax incentives to afford additional gaming positions at their establishments. “The owners of these boats are the ones taking the risks,” Molaro said.

Anita Bedell, executive director of Illinois Action Illinois Church Action on Alcohol and Addiction Problems, said increased gaming positions and casinos would increase addiction among Illinois residents. “Anytime you open it up and you make gambling more available and you make it more acceptable, then people who would not ordinarily go to those casinos will.”

In the past week, Quinn said he would not sign legislation that he found to be “top-heavy.”  “We can’t have a top-heavy proposal in Illinois on gambling that’s going to make us the Las Vegas of the Midwest. …Gambling sounds good if you say it fast. There are a lot of proposals out there that when you look at them, you wonder how much money indeed they are going to raise.”

However, today, the last day of the spring legislative session, a spokesperson for the governor said Quinn, who also previously opposed slot machines at the Illinois State Fairgrounds, remains open to proposals that could raise revenue, create jobs and protect funding for education.

Skokie Democratic Rep. Lou Lang, who sponsored the bill in the House, said he does not think he will have to personally lobby Quinn to sign the bill. “Thousands of people are going to be faxing, and emailing, and calling to tell him it’s the right thing to do, and he ought to sign this bill. I am certain the mayor of the city of Chicago, [Rahm Emanuel,] will be calling.”

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