SPRINGFIELD, Ill. (AP) — Cash-strapped Illinois is considering a massive casino expansion in Chicago and elsewhere that could leave nearby competitors playing for smaller stakes.
With most state governments facing serious budget
problems amid plunging tax revenues, expanding or even adding gambling can seem
like an attractive solution. It brings with it not only the possibility of more
money without raising taxes, but also new jobs. Proponents of Illinois' plan
say it could raise up to $1 billion in new tax revenue annually for a state
that could face a deficit of up to $15 billion next year.
But experts point out that while it could allow
Illinois to take more money from its own residents rather than having them
spend their money in Indiana or Wisconsin, it's unlikely it would drum up new
gamblers or draw people from very far away. And with casinos already scrambling
for every customer, it's possible Illinois will become so crowded with gambling
opportunities that some casinos will fail, they warn.
"The pie is finite," said Bill Eadington,
director of the Institute for the Study of Gambling and Commercial Gaming at
the University of Nevada, Reno. "Gaming is subject to the same laws of
economics as every other industry, and I think legislators have a hard time
understanding that."
Illinois already has nine riverboat casinos and a
10th on the drawing board. The proposed expansion would more than triple the
state's gambling capacity, putting a land-based casino in Chicago, two more
riverboats in the Chicago suburbs and two riverboats in more rural parts of the
state. In addition, six horse-racing tracks would be allowed to add hundreds of
slot machines and existing casinos would be allowed to expand by two-thirds.
At the Majestic Star in Gary, Ind., Evelyn
Lebovitz, an 88-year-old retiree from Chicago, was enthusiastic about the
prospect of a casino in her hometown.
"I'd love it. It's a lot closer. It takes us
over an hour to get here by bus," she said. "I'd also rather have my
money go to Illinois."
Twenty-one states authorize casinos or racetracks
that offer slot machines, according to the American Gaming Association.
Twenty-nine have casinos run by American Indian tribes.
In the Midwest, only Nebraska and Ohio do not have
casinos of some sort, and Ohio voters approved casinos in the fall. Many other
states have jockeyed for advantages, such as letting riverboat casinos stay
docked so gambling can continue at all times or switching to land-based
casinos. Illinois is considering exempting casinos from its ban on indoor
smoking because of fears that gamblers are going to other states, where they
can puff away while dropping coins in the slot machines.
But experts say it's the proximity to a gambler's
home that really matters. An American Gaming Association survey earlier this
year of people who live in a county with a casino found that of those who had
gone to a casino within the past year, only one-third went to one outside their
area.
Bill Thompson, a gambling expert at the University
of Nevada, Las Vegas, cautioned against looking at casinos as a form of
economic development. Because gamblers mostly come from nearby, he said,
whatever the casino and the state take in was already in the community and
probably would have been spent there anyway.
"It doesn't help your economy unless you bring
visitors in from over 100 miles away," Thompson said. "You would need
to attract overnight visitors who aren't already coming."
Larry Buck, general manager of the two Majestic
Star casino boats in Gary, said he's not too concerned yet about an Illinois
expansion but acknowledged that new, conveniently located casinos in the
Chicago area could mean fewer gamblers drive to Indiana, which already saw its
gambling revenues decline slightly over the past year.
"In gaming it's not very much different from
retail," Buck said. "For example, if you want to go shopping to buy
socks or underwear you would probably go to a mall that is closest to your
home. It's very similar in gaming."
Some states have already had to deal with the
possibility of having too many gambling options in one area. In order to avoid saturating
the St. Louis and Kansas City areas with casinos, the Missouri Gaming
Commission recently awarded the state's 13th and final license for a casino in
Cape Girardeau, a Mississippi River town 100 miles south of St. Louis.
"All of the applicants have submitted
proposals for medium-sized facilities but only Isle of Capri is far enough from
existing Missouri casinos to minimize cannibalization," the report found.
The proposed Illinois expansion, which has been
approved by the state Senate, faces a tough road. Democratic Gov. Pat Quinn
questions the proposal, and the Illinois House may disagree with parts of the
plan. Similar efforts have failed in the past — but that was before the state's
deficit ballooned to the point that it could hit $15 billion next year.
Existing Illinois casinos, which have seen their
business fall off by nearly one-third over the past couple of years, are
fighting the idea vigorously.
"This monumental expansion is like saying,
'Homes have lost 32 percent of their value and the number of people buying
homes is at an historic low, so let's build more homes until we have three
times the number we need,'" Tom Swoik, executive director of the Illinois
Casino Gaming Association, said at a recent legislative hearing.
"It just does not make good business sense to
expand in a shrinking market."
Associated Press writers Tom Coyne in Hammond, Ind., and Jim Salter in St. Louis contributed to this story.
Copyright
2010 The Associated Press.
(AP
Photo/Seth Perlman, File)
