Illinois: Cooking the goose

Illinois: No end in sight; Boyd gets some love

“So much for a [gross gaming revenue] stabilization,” sighed analyst Joseph Greff in a J.P. Morgan investor note, after Illinois‘ casino revenues dropped 7% in November. Whenever you think the Land of Lincoln’s casinos have hit bottom, they sink lower still. The statewide gross of $105 million was the worst of the 2009-10 period, although at the present pace December will be worse still. A report from the state’s Commission on Government Forecasting & Accountability, prepared before the November numbers were released, already had Illinois’ casino economy at its lowest level in a decade. (Casinos were legalized in the state in 1990.)

Casinos in the St. Louis area (led by Pinnacle Entertainment’s River City) continue to sap their Illinois competitors, with East St. Louis-berthed Casino Queen down 12% and Penn’s Alton Belle off by 8%.

Impervious to reality, lawmakers like Waukegan state Sen. Terry Link (D) pushed through a lame-duck bill that would create an insane level of gaming expansion: four more riverboats and racinos with 6,300 slots. The lower house must also consider the bill, which Gov. Pat Quinn has opposed … albeit not without some Obama-style wishy-washy-ness. (Is it something in the Illinois water?) Although the proposed law would ease the state’s usurious gaming tax rate (50% of revenues exceeding $200 million) it would also potentially triple the number of gambling positions in the state. The deleterious effects on existing casinos hardly need belaboring. Even Wall Street analysts oppose the measure, using phrases that rarely pass their lips, like “too much gaming.” Not content to have cooked the state’s golden goose, Illinois politicians seem hellbent on eating it for lunch, too.

Borgata is expected to touch bottom next year ....