Sports gambling a budget cure-all?
Some legislators are betting on sports wagers as an untapped source of revenue
By Mark Guarino
Some lawmakers are betting that sports gambling could be a cure for the state’s budget woes, but a committee hearing Monday suggested that the General Assembly is far from reaching a consensus on the issue.
Multiple efforts to expand gaming in the state are moving forward, with advocates saying that it is the revenue source the state needs to curb its desperate budget problems.
They are responding to a U.S. Supreme Court ruling earlier this month that strikes down a federal ban on sports gambling as unconstitutional. So far, at least five state senators and representatives have filed bills they hope will get sports betting up and running in Illinois.
Their goal is to make Illinois a player in an industry worth $240 billion, according to the American Gaming Association, an advocacy group in Washington, D.C. But this month the AGA also warned it will take “smart, efficient regulation” to, among other things, “generate new revenue for states.”
Ten commercial casinos in Illinois currently contribute $3 billion in economic activity and $968 million in federal, state, and local tax revenue, including $537 million in gaming taxes. According to the AGA, the industry currently fills more than 16,000 jobs in the state.
Arlington Park track manager Tony Petrillo testified Monday at a House committee hearing that the expansion would generate an additional $100 million in state tax revenue and create up to 1,500 permanent jobs.
“The industry is in desperate need of help. We are on the verge of extinction from fierce competition from surrounding states that have horse racing and have casino-type gaming,” he said.
So far, however, disagreements about exactly how much revenue the state will reap, and the effect it will have on existing casinos, have caused reform efforts to stall.
Senate Bill 7 failed in in a House committee hearing Monday by a 5-4 vote. Opponents say the expansion would cannibalize the state’s 10 existing casinos, which would damage revenue statewide. Jay Keller of Penn National Gaming, which operates four casinos in the state, testified that the bill will give the state the equivalent of 52 casinos, more than five times the number the it has today.
Keller argued that would be too much of a good thing, as he said the bill “would put Illinois at a level that people would consider (unacceptable)."
Adding to the opposition was Illinois Casino Gaming Association Executive Director Tom Swoik, who said state casinos are already struggling following the legalization of video gaming terminals, which created 6,500 locations for gaming statewide.
Senate Bill 7 would bring six new riverboat casinos to Chicago, Rockford, Danville, Williamson County, Lake County, and the south suburbs of Chicago. It would also permit slots at O’Hare and Midway airports, as well as all Illinois horse-race tracks. Taverns and restaurants that already have video gaming could add an extra terminal and increase both bets and payouts.
State Sen. Terry Link, a Democrat from the northern suburbs of Chicago, said he was disappointed by the committee vote. He characterized the expansion as a “win-win situation for everybody” because it would fill the budget gap without raising taxes. “To those who have a little bit of a problem I just say one thing: Suck it up, because you’re going to still make money in this industry and you know you are,” he said.
A survey released Sunday by the Champaign News-Gazette, however, finds that the majority of state lawmakers are against expansion, or are choosing to wait and see before deciding. Twenty one of the 55 lawmakers responding said they support, or are leaning toward supporting, legalization in some form. Seventeen lawmakers are noncommittal.
Those opposed say the economic impact is overblown.
Sen. Jacqueline Collins, a Democrat from Chicago, said expansion will “open up more avenues for what is essentially a tax on addiction and desperation.”
Collins added, “The way we gather revenue says something about us as a society, and tying our bottom line to the hope that people lose their savings to gambling is just as ethically dubious as, for instance, mandating that police issue a certain number of citations every month to meet a quota.”
Others said more time is needed to address unanswered questions involving consumer protections, the role of online gaming, and more.