Gov. Pat Quinn appears poised to reject a major gambling expansion bill the Illinois General Assembly passed in May, citing ethical concerns. There are also questions about whether SB1849 will deliver the thousands of jobs its supporters promise, a central reason gaming expansion is appealing in the first place.
Gov. Pat Quinn appears poised to reject a major gambling expansion bill the Illinois General Assembly passed in May. Quinn has “numerous ethical concerns” and “wants to close any loopholes for mobsters,” according to spokeswoman Brooke Anderson.
There are also questions about whether SB1849 will deliver the thousands of jobs its supporters promise, the main reason, along with more state revenue, that gaming expansion is appealing in the first place.
Academics who have studied Illinois gaming such as Bill Thompson, a public administration professor at the University of Nevada Las Vegas, disagree with the conclusions of a widely-cited report commissioned by the Illinois Jobs and Revenue Alliance that the bill will create 20,451 jobs.
“The estimates are not credible, because you can only gain employment from gambling if tourists come into the area,” Thompson says, as neighboring states also have legalized gambling. So money spent on gambling, these critics contend, is cash taken out of other parts of the state economy.
“It is money lost in consumer spending that does not go to cars, refrigerators, food and clothing,” says John Kindt, a business professor at the University of Illinois.
Kindt is particularly critical of the installation of possibly thousands of new slot machines. “Slot machines do not create jobs,” Kindt says. “You just dust them off and collect the money.”
Quinn has until August 28 to take action on a bill that would add five casinos, including one in Chicago, to the state’s existing ten. The bill also calls for slot machines to be installed at six Illinois racetracks.
SB1849 would also increase the maximum number of allowed gambling positions, i.e. places to gamble, at the state’s current riverboat casinos from 1,200 to 1,600. Taken together with the new casinos and slot machines, the bill could lead to an increase in gambling positions, with estimates reaching 32,000. There are currently 12,000 places to gamble in the state.
Quinn has said he wants to change the bill to allow the Illinois Gaming board more time to vet licenses, and include more clearly stated Gaming Board oversight of a Chicago Casino Authority, which would be created to run the Windy City casino.
The governor’s biggest complaint is that the legislation does not ban campaign contributions from gambling interests. Anderson notes that neighboring states, like Iowa, Michigan, and Indiana, all have such bans.
State Rep. Lou Lang (D-Skokie), the bill's author, says he will rewrite the legislation to meet any desired ethical safeguards, including the campaign contribution ban. “He should just give me a piece of paper with the language he wants,” Lang says.
But Lang says Quinn “has been unwilling to talk to me.” When asked about this, Anderson said that it was “great” Lang agrees to the ethics measures, but stressed that Quinn “made really clear” what safeguards he wanted back in May and the governor’s “attitude is do it right the first time.”
Anderson would not explicitly say that Quinn will veto the bill, noting the legislation is still under review.
But Lang says he is resigned to a veto and focused on corralling the 60 percent General Assembly support needed for a veto override this fall. The bill passed the House 69-47, two votes shy of the 60 percent House support needed for a veto override, and narrowly cleared the Senate 30-26, six votes shy of 60 percent support.
Lang hopes to pick up votes by stressing jobs, revenue and economic development; he claims SB1849 will produce about 90,000 jobs and that smaller estimates do not fully consider the “ripple effect” gaming brings to the economy.
The New Jersey-based Spectrum Gaming Group, a gaming research firm, released its study in April at the request of the Illinois Jobs and Revenue Alliance, a coalition of 75 members, mostly city chambers of commerce and union locals, that support SB1849.
The group arrived at their precise jobs figure by spending a week visiting current Illinois casinos and racetracks and then using a formula “based on the projected market demand.” The report explains that the state used the “sophisticated Regional Economic Modeling, Inc. (REMI) program” to develop job estimates.
The 20,451 jobs created are the estimated direct and indirect jobs SB1849 will produce by 2016. It includes 9,783 permanent casino jobs and 2,723 racetrack jobs.
Joseph Weinert, senior vice president at Spectrum, said in an interview that the group incorporated the substitution effect, which considers the fact that money spent on gambling might be in substitution for other purchases. “All the numbers that you see there are net numbers,” Weinert says.
Weinert contends that the demand for new gaming positions will be met by the fact that casinos will now be in more convenient locations for people, including the facility slated to be built in downtown Chicago. “The closer people are to gaming, the more likely they are to partake in that activity,” Weinert says.
But in addition to academics, Tom Swoik, executive director of the Illinois Casino Gaming Association says that new gambling positions will not create new Illinois gamblers, but instead might over saturate a limited, niche market. “Our revenues are down 34 percent since 2007,” says Swoik adding that the state is “not creating any new gamblers.”
Swoik even partly disagrees with the idea from gambling proponents, including Chicago Mayor Rahm Emanuel, that a city casino will lure multiple Chicago-area residents who currently place their bets in Indiana. “There may be a few people brought back, but as long as we don’t have smoking, people will stay in Indiana,” Swoik says.
Quinn’s office has remained largely agnostic on the debate over how much jobs and revenue gaming might bring. “It’s really all over the map in terms of the economic forecasts,” Anderson says.
One sector that would almost certainly benefit from gaming expansion is construction. Unlike casino and slot machine jobs, there is no projected market demand or other economic hypotheses that determine how many people are needed to build a new casino. The Spectrum study estimates that SB1849 would create 4,583 temporary construction jobs.