CHICAGO — Supporters and opponents of a Chicago casino and expanded gambling statewide shared their opinions during a day-long hearing on new legislation Wednesday.
Supporters touted them as salve for the city and state's fiscal ills while opponents warned of oversaturation and higher crime and addiction problems.
Previous legislation that cleared the General Assembly authorized a city owned Chicago casino but Gov. Pat Quinn vetoed it, saying it allowed too great an expansion of gambling and lacked sufficient ethics oversight. The new legislation from Rep. Bob Rita, D-Blue Island, drops city ownership of the Chicago casino and tightens oversight and ethics rules.
One proposed amendment to the legislation would allow for a publicly owned land-based casino in Chicago that could be funded with $900 million in state borrowing.
Another amendment allows for a total of five new casinos including one in Chicago although it would be smaller than the one permitted in the other amendment. The amendments are tacked on to Senate Bill 1739.
Under the new Chicago casino plan, the state and city would evenly split gambling revenue with the city's share earmarked for pensions, education, and capital spending while the state's windfall would go towards education and capital.
"These are the three areas where everybody is saying we need revenue," Rita said. Depending on the ultimate number of casinos and the size of the Chicago one, an additional $400 million to $1 billion in revenue could be generated annually.
Rita said he would push for passage of the legislation before the General Assembly's scheduled adjournment at the end of May.
The new pitch comes as Chicago has proposed phasing in a $250 million property tax increase to cover an overhaul of the city's laborers and municipal pension funds. The General Assembly approved the reforms but Quinn has not said whether he would sign the package. The city also faces a $600 million spike in contributions for its public safety funds.
Mayor Rahm Emanuel's administration, which had previously lobbied for a city owned casino, did not testify at the hearing Wednesday and has suggested that a stable source of revenue, not one that can fluctuate depending on economic times, is needed to cover increased pension contributions.
Quinn continues to battle state budget woes, saying the state can't afford to let a 2011 property tax hike partially expire next year without deep cuts to education and other services, or letting a $5 billion backlog of bills grow. He has proposed making the higher tax rates permanent. The state's $31 billion capital program is winding down and Quinn has said he wants a new one but has not outlined how the state could afford it.
The Illinois Gaming Board, which opposed the previous legislation that allowed for city ownership of a casino, took a neutral position on the new proposal.
"This is a significantly different piece of legislation," said board attorney Caleb Melamed.
The single-Chicago-casino amendment that allows for up to 10,000 betting positions would make it the largest casino anywhere and some suggested it would over saturate the market. The amendment that allows for five casinos would permit 4,000 betting positions at the Chicago casino.
The state currently receives about $550 million annually from gambling. That's down from a peak of $700 million before the recession. Some of the drop is also attributed to the state's passage of a smoking ban. Growing video gambling is expected to add another $115 million annually to the state's tab.
Chicago Chamber of Commerce president Kim Goluska said the Chicago casino should be built downtown and called Chicago "a prize for the gaming industry." He stressed that lawmakers as they decide on a Chicago casino should note that it could potentially generate an additional $5 billion to $6 billion for the state economy and create 17,000 jobs.
Church groups and social organizations testified that expanding gambling would carry social costs and fuel gambling addictions and crime.
Tom Swoik, executive director of the Illinois Casino Gaming Association, which represents some existing casinos, said the onslaught of video gaming has already led to over saturation.
This casino could be a considerable risk" for the state because of the proposed borrowing to finance the Chicago casinos, he said. Other casinos in the state are governed by the gaming board but owned and operated privately.
The Chicago Crime Commission's Art Belik spoke in opposition of a publicly owned casino. "The track record of corruption at the city and state level is a national disgrace," he said, adding a government involvement could provide a public trough of campaign jobs.
