Illinois Pushes For Expanded Casino And Online Gambling Bill

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Friday, February 28th, 2014 | Written by Charles Washington

For the third time in as many years, the Midwestern state of Illinois is pushing to expand its gambling industry, and included in Rep. Bob Rita’s gambling bill to authorize five new casinos, and allow slot machines at racetracks, is legislation which would allow casino license holders to apply for internet gambling licenses.

Illinois needs to plug $1.5bn shortfall

Like many other gambling markets in the USA, Illinois, too, has reported a drop off in its earnings and last year the state’s ten casinos generated $1.19 billion in gross revenues, 6% down on the $1.27 billion taken in 2012. Combined with shortfalls in other domestic industries, state lawmakers have been looking into new ways to plug the expected $1.5 billion budget gap, and gambling expansion is being touted as a means of adding a further $400 million to $1 billion a year in revenues. From that total, it has been suggested Illinois could reap almost $200 million annually from a legalized online poker industry.

As a result, the Legislature held a public hearing in East St. Louis on January 28th, and its drive to push for an expanded state gambling bill will receive a second hearing at the Tinley Park Convention Center on March 3rd. Commenting on the issue, Rep. Bob Rita, said:

“I’m a firm believer that gambling expansion can provide great benefits to the state of Illinois and the communities where it comes. But it is important that we put a bill together that is transparent and that deals fairly with taxpayers and all of the interests involved. My hope is these hearings put us on the path to getting that done this spring.”

Other Illinois gaming expansion bills vetoed in past

Nevertheless, Illinois State Governor Pat Quinn has vetoed two previous attempts to expand state gambling, and considering Rep. Bob Rita’s gambling bill is apparently a near copy of state Senator Terry Link’s bill which failed last year, prospects are slim legislation will be passed ahead of May’s 2014 session wraps up.

In the past, Gov. Pat Quinn has emphasized that the state has got just “one opportunity to get it right” and lay the foundation for solid economic development. Quinn also said that when considering legislation he would ensure no loopholes were left open which would allow corruption or mobsters to flourish in Illinois’ gaming industry.

Still, Illinois faces a huge funding gap in its its public pension system, with its unfunded pension liability reaching a massive $97.46 billion in 2013, according to The Commission on Government Forecasting and Accountability. Along with other gaps in its State budget, the changing economic landscape could encourage a more conciliatory approach from the Democratic governor.

Difficulties lie ahead for Illinois Internet Gambling

As part of the state’s drive to assess the pros and cons of regulated internet gaming, The Illinois Executive Senate Committee held a hearing yesterday, which was also attended by John Pappas from the Poker Players Alliance.

A chief concern for gambling interest groups in Illinois, including casino owners and horse track operators, is that expanding online gambling may serve only to cannibalize their existing gaming business. Many opponents point to the fact that in its first year of being legal, video gaming revenue experienced rapid growth in Illinois, while the state’s casino revenues slid dramatically in 2013. As Jeff Watson, manager of the Casino Queen in East St. Louis, commented just a few weeks ago:

“There’s no question there’s been an impact. The St. Louis gaming market is fully saturated, and any time you add more gaming positions into a saturated market, you’re just diluting the existing operations. Basically, you’re just cutting the pie up into more and more pieces.”

However, Poker Players Alliance Executive Director John Pappa was keen to allay the concerns of local interest groups at the hearing by assuring them that ten years of legalized internet gambling in Europe pointed to the fact “cannibalization” would not be a problem.

Nevertheless, anti-gambling expansion proponents will still need some persuading if they are to be convinced online gambling will help expand the gambling market and provide a significant revenue opportunity. The regulated online poker markets of France, Spain and Italy have been in steady decline since legalization, while the meager revenue results from the USA’s three regulated states of Nevada, Delaware, and New Jersey will do little to pique their interests.

Finally, there is the fact election years are not usually the best times to try and pass controversial bills, and as state Rep. Lou Lang, explains: “I believe there’s an opportunity to pass a bill that the governor will sign. Having said that, it’s a timing issue. There’s an election year, and gaming is a difficult issue at best.”