Illinois Governor Vetoes Gambling Expansion

CHICAGO – Illinois Gov. Pat Quinn on Monday vetoed a 2011 gambling expansion bill he has long criticized for lacking sufficient regulatory oversight and he warned in his veto message that more revenue from additional gambling won’t solve the state’s pension crisis.

The bill vetoed Monday would have allowed five new casino licenses and the installation of slot machines at horse racing tracks and Chicago’s airports, and harness racing at fairgrounds. The veto comes nearly two years after the bill was passed by the General Assembly.

Senate President John Cullerton, D-Chicago, did not forward it to Quinn until January as supporters attempted to work out a compromise that could both win passage and quell Quinn’s concerns.

Its backers had argued that the state sorely needed the infusion of about $1.5 billion in one-time cash from new casino licenses and annual tax revenue of about $500 million generated by the expanded gambling.

Backers of new casino licenses, including Chicago Mayor Rahm Emanuel who wants to build a Chicago casino, also contend the new licenses are needed to keep tax revenues and jobs now lost to casinos across state lines. A second bill that passed last year was forwarded to Quinn and he vetoed it over similar concerns.

Quinn’s oversight objections stemmed from the lack of state regulatory control proposed for the Chicago casino and the absence of procurement guidelines. Quinn also raised concerns over the lack of a ban on campaign contributions by gambling licensees and casino managers and he called the level of expansion “excessive.”

The allure of new revenues did not sway Quinn even with the state grappling with $95 billion in unfunded pension liabilities that have driven series of rating downgrades. Without action this year on pension reforms, the state likely faces further credit deterioration.

“We cannot gamble our way out of our pension challenge,” he said in his veto message. “Any gaming revenue is a drop in the bucket compared to the ….unfunded pension liability that Illinois faces. I urge lawmakers to prioritize public pension reform, the most urgent issue facing our state.”

Quinn will unveil a proposed fiscal 2014 budget on Wednesday and then attention will likely focus on passing pension reform.

Gambling expansion supporters believe a compromise leading to a new bill could also be reached during the current spring session. Quinn and Emanuel late last year said they were close to reaching an agreement on a casino for Chicago.

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