Illinois’ Governor Vetoes Gambling Bill Pitched As Revenue, Jobs Bill

Published October 10, 2012

Illinois Gov. Pat Quinn (D) has vetoed a bill that would have vastly expanded gambling in Illinois, in the process bucking many legislators in his own political party and fellow Democrat mayor of Chicago, Rahm Emanuel.

The bill had been promoted as a way to boost state government revenues and jobs, but Quinn cited Chicago’s and the state’s unsavory history of politics influenced by organized crime and insider dealings as a big reason for his veto.

“We’re not going to have loopholes for mobsters in Illinois,” said Quinn in announcing his veto. “The bill that was on my desk was woefully deficient when it came to protecting integrity and honesty and regulation of gambling in our state.”

Two of Quinn’s immediate predecessors, former Republican Gov. George Ryan and former Democrat Gov. Rod Blagojevich, are in federal prison for corruption.

SB 1849 would have allowed a casino in Chicago and four other locations, created six new racetrack casinos or “racinos,” and allowed hundreds of additional slot machines at all the existing casinos.

A report commissioned by the Illinois Jobs and Revenue Alliance said expanding gambling would have created 20,451 jobs.

Des Plaines a Winner

Meanwhile, a state report shows Illinois’ newest casino has increased gambling revenues for the state, apparently at the expense of some other casinos.

The Rivers Casino in Des Plaines—a suburb near Chicago’s O’Hare International Airport—opened last year, and with nearly a year of operation under its belt, it is likely the reason casino revenues and admissions have risen.

Casino revenues across the state rose 22 percent from January through May to $698.7 million over the $570.7 million collected in the same period in 2011. And although patronage dropped at six of the state’s 10 casinos, total casino admissions in the state rose 23 percent.

Losers Elsewhere

The numbers don’t please officials in several of Illinois’ other casino cities.

“Any time you introduce a new gaming property into a jurisdiction, those that are already in that jurisdiction will suffer a loss of revenue,” said Jim Murphy, assistant to Joliet Mayor Thomas Giarrante.

Murphy said the opening of the Harrah’s Casino in Joliet in 1992 proved a boon to the city, which he called a “poster child” of distressed river towns that needed to revitalize economically and rebuild infrastructure.

The Des Plaines Rivers Casino is now the closest casino to Chicago, just 20 miles from the city center. Joliet’s Harrah’s Casino has seen business decline since the the Des Plaines casino opened.

The government of Elgin, host city to the Rivers Casino’s next closest rival, Grand Victoria Casino, budgeted for an expected loss of up to 25 percent in its “riverboat fund” when Rivers opened, said City Chief Financial Officer Colleen Lavery. The fund finances city infrastructure, such as sewer and street improvements, and fixed asset purchases, such as public service vehicles. Lavery expects further reductions.

Bad Bet

University of Illinois Business Professor John Kindt, a nationally known critic of gambling, said gambling should be phased out of the state altogether.

In contrast to proponents’ claims of economic growth through gambling, Kindt and fellow academic William Thompson of the University of Nevada say the expanded gambling would have cost about 15,000 jobs per year.

Slot machines make up the majority of casino business and take in an average of $300,000 per machine annually. That’s money people aren’t spending on food, clothing, cars, appliances, or other things, Kindt said, and for every slot machine, one job is lost from the consumer economy every year.

“Slot machines don’t create any jobs at all,” he said. “You just dust them off and they keep taking money.”

Kindt cited the 1999 National Gambling Impact Study Commission, which called for a pause on gambling expansion, and additional academic research pointing to the ill effects of gambling on the economy, to say nothing of the social ills it causes.

“The state of Illinois is doing just the opposite of what all the federal and academic experts recommended,” he said. “It’s time for people to say the economic emperor of gambling is wearing no clothes. There’s no justification for this gambling expansion bill.”