Illinois Could Become Midwest Gambling Capital

An 816-page bill introduced and passed by the Common Assembly over the weekend will, if totally realized, transform Illinois in to the gambling capital of the Midwest.

The legislation legalizes sports gambling; sanctions six new casinos, including one in Chicago; increases the number of video gambling machines as well as the maximum bet; and transforms the state’s horse racing tracks into “racinos” by permitting casino operations in the state’s 3 existing tracks while allowing two much more to open.

The amount of state-sponsored gambling “positions” – seats to location a bet inside a casino, bar or racino – will grow from almost 44,000 to almost 80,000. That is about 4 occasions the number of positions in any neighboring state, based on a evaluation of gambling statistics by ProPublica Illinois and WBEZ.

Within two years, Illinois could have much more than 7,000 video gambling establishments, 5,000 lotterylike sports betting kiosk places, 16 casinos, five racinos and on-line sports gambling accessible on millions of mobile phones. The bill even enables video slot and poker machines at Chicago’s airports, O’Hare and Midway.

Illinois has the lowest credit rating in the country, along with a recent report by Moody’s Investors Service discovered it’s certainly one of two states deemed ill-prepared to climate another recession. The other is New Jersey. Lawmakers are wagering that the huge gambling expansion will assist pull the state out of its monetary crisis whilst making significant contributions to a $45 billion developing campaign known as Rebuild Illinois, the state’s initial capital plan in a decade.

It’ll take years to figure out if this historic bet pays off. But if past outcomes offer any hint, the results are most likely to fall far brief of what lawmakers are promising.

In 2009, during the depths from the Great Recession, the Illinois legislature produced a similar gamble: In much less than 48 hours, lawmakers introduced and passed the Video Gaming Act, the state’s largest gambling expansion because the creation from the lottery in 1974. Legislators stated video gambling would generate $300 million a year to fund another building program, this one called Illinois Jobs Now! Inside months, the state began borrowing a huge selection of millions of dollars, eventually racking up much more than $10 billion in new debt.

A ProPublica Illinois-WBEZ investigation in January revealed that it took nearly a decade for video gambling to attain revenue projections, exacerbating the state’s monetary woes within the procedure. Lawmakers also skimped on funding for regulatory and social costs. Meanwhile, a handful of video gambling operators reaped huge earnings, in component simply because the state has certainly one of the lowest tax prices on video gambling within the nation.

“The fast expansion of sports gambling and casinos without any public vetting of what the capacity or the impact from the expansion will be is quite disappointing and may wind up having exactly the same sort of unfavorable consequences that earlier gambling expansions did,” said Laurence Msall, president of the nonpartisan Civic Federation, a government watchdog group.

In the newest gambling expansion bill, which cleared its final legislative hurdle Sunday and is anticipated to be signed by Gov. J.B. Pritzker in the coming weeks, the Common Assembly addressed a few of the problems exposed in “The Bad Bet” investigation.

Despite an industry lobbying campaign to block a tax increase on video gambling machines, lawmakers raised the tax by 3% starting July 1, with an additional 1% kicking inside a year later. The rate is presently 30%, with 25% going to the state and 5% to nearby governments. The tax improve will move Illinois’ tax price on video gambling above Louisiana. But Oregon, Pennsylvania, South Dakota and West Virginia all have rates at 50% or greater.

Following a ProPublica Illinois-WBEZ story last week revealed that several powerful lawmakers and their family members had monetary ties towards the video gambling business, most abstained from voting around the gambling expansion bill more than the weekend.

Prior to the Senate vote late Sunday afternoon, Minority Leader Bill Brady, a Republican from Bloomington, informed his colleagues that he had a conflict of interest and wouldn’t vote around the bill. He also said he had recused himself in the closed-door negotiations that created the legislation. Also abstaining from the vote was Sen. Thomas Cullerton, a Democrat from Villa Park who’s a sales agent for a video gambling operator.

But Sen. Antonio Muñoz, a Chicago Democrat and also the assistant majority leader, presided more than the session and voted to approve the expansion bill even though his son is a sales agent to get a video gambling operator run by former Democratic Sen. Michael Bond. The elder Muñoz responded with a statement that didn’t straight address his involvement in the vote.

“I’m proud of my son,” Muñoz stated. “He’s a 31-year-old disabled Marine combat veteran who served in Afghanistan as a rifleman and struggles with PTSD consequently.”

When lawmakers passed the Video Gaming Act in 2009, they significantly expanded the workload from the Illinois Gaming Board with out providing additional sources to implement the law, ProPublica Illinois and WBEZ found. This time, the legislature gave the gaming board an $8 million spending budget improve, plus as a lot as $20 million in extra funding to deal with its expanding portfolio, which now includes sports gambling, six new casinos and racinos.

Lawmakers also made the board much less transparent. Tucked inside the sprawling bill is really a paragraph that provides the gaming board broad authority to close its meetings below the Open Meetings Act. Judges in two current lawsuits discovered the board violated the Open Meetings Act by going into closed session improperly. ProPublica Illinois has filed a lawsuit following being denied recordings of certainly one of those meetings. That lawsuit is pending.

Lawmakers also significantly increased the amount of cash set aside to fight gambling addiction. This year, ProPublica Illinois and WBEZ discovered that the state ranks toward the bottom in funding for addiction services – 28th out of 40 states. Unlike a number of other states with legalized gambling, Illinois has never measured the prevalence of gambling addiction, what specialists think about a crucial initial step in fighting what the American Psychiatric Association now recognizes as a disease similar to drug and alcohol addiction.

Below the new budget, which also passed over the weekend, the General Assembly increased the funding for gambling addiction from about $800,000 a year to $6.eight million, an 8 ½-fold improve.

The gambling expansion bill also calls for a self-exclusion plan for sports betting, which will permit issue gamblers to bar themselves from putting bets on games. The state features a similar program in place for casinos. But it still lacks a self-exclusion list for the nearly 7,000 video gambling places, which legislators could have added towards the expansion bill but did not.

Whilst addiction counselors welcome the budget improve, they say they are wary from the huge gambling expansion which will accompany it. Research show that because the quantity of gambling opportunities increases, so does the rate of addiction. And if all the gambling options within the expansion come to fruition, the amount and variety of gambling in Illinois will probably be unprecedented.

“It’s a substantial increase in funding,” stated Anita Pindiur, executive director of the Way Back Inn, a Maywood therapy center that helps about 80 people a year with gambling issues. “But this can be a huge expansion, and it is not rolling out gradually. It’ll occur extremely quick. And that’s going to have an influence on people. We have to educate them on the indicators of addiction, or they won’t know when there is an issue until it is as well late.”

Inside a statement released after the Home passed the bill Saturday, Pritzker hailed the vote because the fulfillment of a key element of his legislative agenda, 1 he says will create jobs, make Illinois much more competitive with neighboring states and bring much-needed income to struggling local governments.

“Today is really a win for our whole state,” he said.

However even before lawmakers authorized an estimated 23,000 new gambling positions, ProPublica Illinois and WBEZ had found that video gambling has cannibalized casino revenue. In between 2013 and 2017, state revenue from casinos in Illinois declined 15%, from $462 million to $393 million, as income from video gambling machines grew almost 900%, from $30 million to $300 million, state records show.

The expansion bill increases the maximum quantity of gambling positions at casinos to two,000. But only two of the state’s 10 existing casinos have hit the present limit of 1,200 positions, raising concerns about whether the state has reached a saturation point. Three have fewer than 1,000 positions.

That’s 1 purpose the Illinois Casino Gaming Association opposed the expansion bill. Whilst lawmakers authorized a measure that will permit the state’s 10 riverboat casinos to relocate to land in hopes they will pump millions of dollars into new brick-and-mortar facilities, a representative from Penn National, which owns three casinos in the state, stated it was unlikely the company would do so.

“This is really a bill which will develop the number of gambling positions, but it is not going to increase the number of gamblers,” stated Tom Swoik, the executive director from the Illinois Casino Gaming Association. “This state has not been business-friendly to the casinos from the starting, and this bill doesn’t assist that.”

Illinois was certainly one of only four states that saw a decline in consumer spending at casinos in between 2016 and 2017, based on a recent report by the American Gaming Association.

Yet the Common Assembly, Pritzker and newly elected Chicago Mayor Lori Lightfoot are banking on a four,000-position mega casino in downtown Chicago to assist bail the city out of its crushing pension debts, which are estimated to go up much more than $1 billion to $2 billion by 2023.

While a Chicago casino will certainly draw vacationers, it’ll compete for local players with tens of thousands of video slot and poker machines located just outdoors the city’s borders.

“This revenue will not be available in time to considerably address the city of Chicago’s current funding challenge nor its impending $1 billion increase in pension funding,” Msall stated.

What’s much more, study shows that gambling revenues are closely tied to the broader economy. In current years, Illinois has seen a wholesome increase in revenue from gambling. But which has come amid certainly one of the largest economic expansions in U.S. history – and while thousands of video gambling machines have been added across the state.

During the 2008 monetary crisis, before the state had video gambling machines, casinos saw steep declines in revenue. That’s why specialists caution state and nearby governments about relying on gambling revenues to fund borrowing or cover recurring costs, like pension payments.

Chicago is not the only city hoping a casino will bail it out. A string of struggling locations across the state are banking on casinos following the legislation added licenses for Waukegan, Rockford, Danville, Williamson County and the south suburbs of Chicago.

However many of these areas are already inundated with video gambling machines. By the end of April, Waukegan had 54 establishments with 262 video slot and poker machines peppered all through the city. Adding a two,000-position casino to the town will increase the number of gambling positions almost eightfold.

Rockford pulled out all of the stops to land a casino, even getting Inexpensive Trick’s Rick Nielsen to push to get a license. Yet the city currently has one hundred establishments with 477 video gambling machines. That is on top of the 87 locations and 423 video gambling machines in surrounding towns like Loves Park, Cherry Valley, Edgewood and Machesney Park.

And below the expansion, bars, restaurants, fraternal organizations and gambling parlors will be allowed to possess six machines, up from 5. Trucks stops will probably be permitted to hold 10 machines. The bill also allows the maximum bet to improve from $2 to $4, and for individual locations to make jackpots up to $10,000, modifications which will make video gambling locations much more competitive with casinos.

It’s also possible that new casinos will drain income from nearby bars and restaurants which have begun to count on video gambling proceeds. Rockford, for example, has the second-highest number of video slot and poker machines in the state, and also the draw of a new casino could drain gambling dollars from places there.

“I believe individuals from Rockford are underestimating the influence this really is going to have on small bars and restaurants there,” Swoik stated. “There’s most likely to be a shift from the

to the casino.”

Also in the mix are an untold number of sweepstakes machines, devices similar to video slot and poker machines which have been proliferating in Chicago. The sweepstakes devices had been essentially legalized in 2013, when a few of the exact same lawmakers who shepherded the state’s newest bet on gambling expansion pushed legislation through the Common Assembly to decriminalize them.

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