In a state as broke as Illinois, it wouldn't be a stretch to assume that the push for aggressive gambling expansion — including a lavish Chicago casino — is all about the money.
But plans for five casinos and slots at six horse tracks would do more to maximize casino profits and increase tax revenue for local governments than to shore up the state's shaky bottom line, according to new fiscal projections provided to the Tribune.
The sweeping casino package vetoed by Gov. Pat Quinn was not destined to generate a major annual increase in gambling revenue for Illinois, according to estimates by the nonpartisan Commission
on Government Forecasting and Accountability.
The projections showed the state's return would be small compared with casino revenue increases because the plan created a smorgasbord of tax cuts and tax breaks for the gambling houses. The legislation also fostered an environment in which horse tracks and new casinos would cannibalize each others' profits and those of 10 existing casinos, according to the commission's estimates.
Lawmakers failed to override Quinn's veto this past fall, but the issue could be ripe for deal-making during the lame-duck session in early January when outgoing lawmakers can cast votes without the pressure of facing re-election.
It's a safe bet that if a new agreement includes the major components of the previous plan, casinos would see a much larger bump in revenue than the state, according to commission projections. Gross revenues made by casinos and the taxes they pay to local governments would more than double, but the state's total take would increase by only 19 percent, the analysis said.
"That's not much of an increase, especially when you're doubling the amount of casinos' gross receipts," said Eric Noggle, a senior analyst with the forecast commission, a support agency that provides financial projections to the Legislature.
"Gamblers in the state will lose double the amount they were losing before, yet the state is only going to be gaining a relatively small (annual) revenue increase," Noggle said.
Such estimates have drawn the ire of gambling expansion backers who insist the revenue will be much greater. They also argue that the projections ignore jobs that would be saved and created at horse tracks and economic development that would be spurred at new casinos and hotels.
"I think their numbers are flat wrong," said Rep. Lou Lang, D-Skokie, author of two previous casino expansion bills that passed the Legislature. "In the history of Illinois gaming, every projection made by every government body has always been low."
A Christmas tree deal
Passing casino expansion in Illinois requires a delicate dance in Springfield.
Lawmakers who back casinos in Chicago, in the suburbs or downstate must be assuaged so enough votes can be tallied, Lang said. So must those who want horse track slots to shore up that industry and others who favor lower taxes and more games for existing casinos to help them compete.
As a result, the latest gambling expansion pitch included slots at four suburban Chicago horse tracks as well as tracks at the Illinois State Fairgrounds in Springfield and in Collinsville, near St. Louis.
New casinos were to be added in Chicago, Danville, Rockford, north suburban Park City and a south suburban Cook County location to be determined by the state Gaming Board.
The plan cut casino taxes, reducing all rates and lowering the maximum rate to 40 percent from 50 percent.
Existing casinos could increase their gaming positions — the number of slot machines and seats at table games — to 1,600 from 1,200.
All these ornaments were considered necessary to pass a so-called Christmas tree bill, and the analysis showed they came with a price — hits to potential revenue for the state.
"This tree fell over," said Tom Swoik, executive director of the Illinois Casino Gaming Association, which represents the state's 10 casinos and is opposed to the expansion plan. "At some point, you add so much it doesn't make sense."
In October, the commission released a study predicting the gambling expansion plan would increase state and local tax revenues from $200 million to $300 million in 2017 — when all the new casinos would have been running for a few years.
However, the analysis did not differentiate between state and local revenue.
In response to questions from the Tribune, the commission conducted a more detailed analysis and concluded that with the new gambling venues, local tax revenues would grow annually by $110 million, or by 102 percent. That income is expected to double because it's tied to a $1 tax paid at the door by each casino patron, money that would increase because of the expansion in gambling locations.
The state's annual revenue would increase by $104 million, or just 19 percent, according to the estimate.
http://articles.chicagotribune.com/2012-12-28/news/ct-met-illinois-casino-expansion-20121228_1_casino-expansion-chicago-casino-casino-industry
But plans for five casinos and slots at six horse tracks would do more to maximize casino profits and increase tax revenue for local governments than to shore up the state's shaky bottom line, according to new fiscal projections provided to the Tribune.
The sweeping casino package vetoed by Gov. Pat Quinn was not destined to generate a major annual increase in gambling revenue for Illinois, according to estimates by the nonpartisan Commission
on Government Forecasting and Accountability.The projections showed the state's return would be small compared with casino revenue increases because the plan created a smorgasbord of tax cuts and tax breaks for the gambling houses. The legislation also fostered an environment in which horse tracks and new casinos would cannibalize each others' profits and those of 10 existing casinos, according to the commission's estimates.
Lawmakers failed to override Quinn's veto this past fall, but the issue could be ripe for deal-making during the lame-duck session in early January when outgoing lawmakers can cast votes without the pressure of facing re-election.
It's a safe bet that if a new agreement includes the major components of the previous plan, casinos would see a much larger bump in revenue than the state, according to commission projections. Gross revenues made by casinos and the taxes they pay to local governments would more than double, but the state's total take would increase by only 19 percent, the analysis said.
"That's not much of an increase, especially when you're doubling the amount of casinos' gross receipts," said Eric Noggle, a senior analyst with the forecast commission, a support agency that provides financial projections to the Legislature.
"Gamblers in the state will lose double the amount they were losing before, yet the state is only going to be gaining a relatively small (annual) revenue increase," Noggle said.
Such estimates have drawn the ire of gambling expansion backers who insist the revenue will be much greater. They also argue that the projections ignore jobs that would be saved and created at horse tracks and economic development that would be spurred at new casinos and hotels.
"I think their numbers are flat wrong," said Rep. Lou Lang, D-Skokie, author of two previous casino expansion bills that passed the Legislature. "In the history of Illinois gaming, every projection made by every government body has always been low."
A Christmas tree deal
Passing casino expansion in Illinois requires a delicate dance in Springfield.
Lawmakers who back casinos in Chicago, in the suburbs or downstate must be assuaged so enough votes can be tallied, Lang said. So must those who want horse track slots to shore up that industry and others who favor lower taxes and more games for existing casinos to help them compete.
As a result, the latest gambling expansion pitch included slots at four suburban Chicago horse tracks as well as tracks at the Illinois State Fairgrounds in Springfield and in Collinsville, near St. Louis.
New casinos were to be added in Chicago, Danville, Rockford, north suburban Park City and a south suburban Cook County location to be determined by the state Gaming Board.
The plan cut casino taxes, reducing all rates and lowering the maximum rate to 40 percent from 50 percent.
Existing casinos could increase their gaming positions — the number of slot machines and seats at table games — to 1,600 from 1,200.
All these ornaments were considered necessary to pass a so-called Christmas tree bill, and the analysis showed they came with a price — hits to potential revenue for the state.
"This tree fell over," said Tom Swoik, executive director of the Illinois Casino Gaming Association, which represents the state's 10 casinos and is opposed to the expansion plan. "At some point, you add so much it doesn't make sense."
In October, the commission released a study predicting the gambling expansion plan would increase state and local tax revenues from $200 million to $300 million in 2017 — when all the new casinos would have been running for a few years.
However, the analysis did not differentiate between state and local revenue.
In response to questions from the Tribune, the commission conducted a more detailed analysis and concluded that with the new gambling venues, local tax revenues would grow annually by $110 million, or by 102 percent. That income is expected to double because it's tied to a $1 tax paid at the door by each casino patron, money that would increase because of the expansion in gambling locations.
The state's annual revenue would increase by $104 million, or just 19 percent, according to the estimate.
http://articles.chicagotribune.com/2012-12-28/news/ct-met-illinois-casino-expansion-20121228_1_casino-expansion-chicago-casino-casino-industry
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