Illinois lawmakers are once again looking at a big expansion of gambling as a way to prop up the state’s ailing finances.
A joint hearing of House and Senate committees last week took more testimony on an expansion bill that would add six new casinos, additional gaming positions at existing casinos and slot machines at horse racing tracks.
That part passed the Senate in 2017 but has never come to a vote in the House.
Last spring, the House added an amendment that adds even more to the mix. It allows racetracks to have table games in addition to slot machines. It also increases the number of video gaming terminals a business can have and authorizes more off-track betting parlors.
The state also is eyeing fantasy sports and sports betting, subjects that will be part of another hearing to be held in Springfield in October.
At the same time, the idea of expanding gaming in Illinois has been debated for years — bills have even passed, but were vetoed — but the expansion has never happened.
“I think there’s enough wind at our backs that if we struck the right balance, many (lawmakers) would say to themselves that this is worth doing as part of a totality of circumstances,” said Rep. Mike Zalewski, D-Riverside, chair of the House Revenue Committee that was part of the hearing. “No matter who wins in November we’re going to remain structurally behind in what we need as far as finances. So there’s going to be a lot of pressure on us to do it.”
Zalewski pointed out both Gov. Bruce Rauner and Democratic challenger J.B. Pritzker have said the state needs to do a new capital construction bill. Expanded gambling could provide revenue to pay for something like that, he said.
Just when something might happen is another question. Zalewski said with a large number of lame ducks in the legislature, a gaming expansion bill might get more support before new lawmakers are seated in January. But he said expansion also needs to be done in the right way and shouldn’t be rushed.
“There’s a balance to strike and hopefully the sooner the better, because I think it makes sense to put this issue behind us and move on to other stuff.”
More gambling in Springfield?
However, Springfield lobbyist and developer Chris Stone isn’t so sure, and he’s got a stake in the issue. Stone wants to bring a casino to downtown Springfield along with video gaming positions that would be permanently located at the state fairgrounds. Right now, a Springfield casino is not part of the expansion bill.
“I don’t anticipate there’s going to be a lot going on in November, December or even early January if they have an early January session,” Stone said. “These things take a little bit of time, right?”
Stone said he is still interested in pursuing a Springfield casino.
“We continue to have discussions with people and continue to want to move forward,” he said. “The last time I looked at it there’s still nine of 10 aldermen who have signed on to at least authorize the legislature to locate a gaming facility here in Springfield. I think there’s support from the county as well.”
While expanded gaming is viewed as a revenue source for the state, there are some cautionary notes being raised. The Commission on Government Forecasting and Accountability was asked to analyze the expansion bill and the impact it would have on gaming revenues. During the hearing, COGFA noted that adjusted gross receipts for the state’s existing casinos have declined every year for the past six years. Tax revenues from casinos have dropped while revenue from video gaming terminals has increased.
Interestingly, receipts at Indiana casinos also have dropped, and COGFA analysts think part of the reason is the proliferation of video gaming in Illinois.
The COGFA report estimated the new casinos in Illinois would only generate about $12 million annually in recurring new revenues for the state. A large part of that is because the bill lowers the tax structure on casinos.
“We’re adding 21,000 new casino gaming positions yet we’re only bringing in $12 million more from casinos?” asked Rep. David Harris, R-Arlington Heights.
“That’s correct. It is not a popular thing for the commission to say,” said COGFA senior revenue analyst Eric Noggle.
Noggle also said that average casino gaming growth nationwide the last five years has only been 0.6 percent.
“It’s not an area where you’ve seen a lot of increase in gaming,” he told lawmakers. “People’s discretionary spending seems to be going in other places.”
At the same time, the bill raises taxes on video gaming terminals, which is supposed to bring in $104 million in recurring new revenue for the state.
Rep. Tim Butler, R-Springfield, was at the gaming hearing in Chicago. He said he, too, was surprised by the low revenue number from casino expansion.
“Something as significant as gaming is in the state of Illinois, I would hope would bring more money into the state coffers,” Butler said. “At the end of the day, that’s the main idea of those of us in public positions why we would support gaming. We view it as a source of significant revenue for the state.”
Contact Doug Finke: doug.finke@sj-r.com, 788-1527, twitter.com/dougfinkesjr.
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Posted Aug 26, 2018 at 1:38 PM
