Illinois Plans to use Six New Casinos to Help Financial Woes

Posted by: on March 9, 2017 in News | no responses

Illinois legislators have put forth a proposal that would expand gambling in the state by constructing six new casinos in an attempt to raise revenue for the state, which has lacked a spending plan for more than two years.

The vote to pass the development of these casinos is part of what is being deemed the “grand bargain” which will end the longest time period a U.S. state has gone without an annual spending plan in nearly a century. The senate has endorsed the gambling expansion, but the legislation required to institute the new casinos has recently been held back by nearly a dozen other related bills waiting to be approved. The deal as whole has been put on hold following Republican Governor Bruce Rauner’s opposition to remaining components of the plan.

The Benefits of the Casino Expansion

Support of the gambling expansion stems from the hope that local players will choose to remain in the state of Illinois when gambling which, in turn, would boost the economy. The proposal would legalize licensed casino operators in Chicago, Rockford, Danville, Williamson County, and other locations in Lake County. Casinos in Chicago had previously been off-limits due to the competition of horse racing in surrounding areas. This would allow any casino, including existing one to be on land, which has the potential end the riverboat gambling trend in Chicago.

Currently, the state’s current riverboat gambling sites are taxed at 50%, but would experience a huge tax reduction in order to continue competing with the new land-based casinos that would be built following this legislation. The largest riverboat gambling sites could be taxed as little as 16% for table games and 20% for slot machines.

The building of six new casino sites across the state would bring with it a large number of construction jobs and the casinos themselves will create permanent jobs in the communities where they are built. An analysis of the Commission on Government Forecasting and Accountability concluded that annual revenue would be boosted by 18% to around $560 million. The analysis forecasted nearly $1 billion in setup fees which would come from sites paying a license fee of $100,000 and $30,000 per gambling position – meaning per slot machine or per seat at a blackjack table.

Similar to the reduction in taxes for existing riverboat casinos, the new legislation would permit existing gambling establishments to expand the number of seats provided by 400, giving them the opportunity to compete with the new casinos. Airports and four horse race tracks in Chicago would also be given the opportunity to offer slot machines on their premises.

Still, Opposition Persists

Those standing in opposition of the new legislation claim that the six additional casinos would only contribute to Illinois’ financial woes. The Illinois Times reported that much of the state’s financial problem was caused by over $35 billion given away since 1990 for gambling interest. The money put forth to develop the new sites would be taking away from educational funding and other funding the state could use elsewhere. Anita Bedell, Head of Illinois Church Action on Alcohol and Addiction Problems, makes the argument that for every $1 the state collects in gambling revenue, $3 is deducted from taxpayers’ money. The $3 deduction would supposedly stem from the rise in crime, bankruptcy, and addiction.