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
“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.
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
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.