 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.
Gambling saturation has become an issue elsewhere in the U.S.,
including Missouri, where the state recently awarded a 13th license
for a casino 100 miles away from the St. Louis area, which is
already home to more than six casinos along the Mississippi and
Missouri rivers.
"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."
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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,'" said Tom Swoik, executive director of the
Illinois Casino Gaming Association, at a recent legislative hearing.
"It just does not make good business sense to expand in a
shrinking market."
[Associated Press;
By CHRISTOPHER WILLS]
Associated Press writers Tom Coyne in Hammond, Ind.,
and Jim Salter in St. Louis contributed to this story.
Copyright 2010 The Associated Press. All rights reserved. This
material may not be published, broadcast, rewritten or
redistributed.
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