Progress Illinois

Some Illinois lawmakers just won't give up on gaming.

Although House Democrats nixed Gov. Rod Blagojevich's proposal to fund a capital program through gambling expansion, it's long been a go-to option for Illinois lawmakers looking to generate revenue without increasing taxes. But while our representatives in Springfield repeatedly return to the gaming well, they've forgotten to provide for the problem gamblers who account for at least a third of the receipts. Joseph Ryan at the Daily Herald has the goods:

A Daily Herald review of the state's casino industry reveals that Illinois falls far short compared to other states in helping gambling addicts even though their tremendous losses bolster the state's bank account, allowing lawmakers to avoid unpopular tax hikes.

This has left a safety net riddled with holes for a projected 384,622 adults in Illinois who are problem or pathological gamblers. [...]

Between 1995 and 2007, the state took in a total of $13.5 billion from legalized gambling and spent $7.3 million on treatment or awareness campaigns.

How do other Midwestern states deal with the problem? Indiana, Michigan, and Iowa all set aside between three or four times as much as Illinois for treatment, research, and awareness. In Minnesota, for example, devotes $2.5 million to treatment and research, allowing a problem gambler to receive inpatient treatment free of charge. In Illinois, a similar 90-day treatment program would cost the patient nearly $30,000, which few gambling addicts can afford.

The saddest part of this whole mess is that gaming isn't even a valuable revenue generator, as Ralph Martire, executive director of the Center for Tax and Budget Accountability, explains in his State Journal-Register column today.

A significant gaming expansion would raise new, recurring revenue — but far more expensively than a tax increase. Estimates are folks have to lose $5 gambling for every $1 of tax revenue generated — as opposed to the $1 for $1 cost of a tax increase. Projections of what gambling expansion would generate also may be inflated. Unless there is unlimited demand among Illinois citizens to gamble, the creation of a significant number of new facilities will siphon at least some business away from existing casinos. As for tax fairness, well, it generally isn’t the Rockefeller family hitting the slot machines, it’s low- and middle-income folks. Given that Illinois is already one of the most regressive taxing states, it makes no sense to increase the disproportionate public finance burden poor and middle-income folks already bear.

The Rockefeller Institute buoyed Martire's argument with their report last month showing that the economic benefits of gambling for state governments are diminishing rapidly. Proceeds in May from Illinois' nine casinos were apparently "down 14 percent from May 2007." A similar trend nationwide has led many other states to move away from this unsustainable funding stream.