|Following the path of Nevada and New Jersey legalising online in the last weeks and just 48 hours after Gov. Quinn vetoed a measure to open a casino in Chicago, Illinois introduces an amended bill to expand the state’s land-based gaming operations and introduce internet gambling.|
For the third time in as many years, an Illinois Senate committee has passed an expansion of casino gaming in the state, but this time it has a caveat: online gaming and poker is a part of the bill.
The new legislation, SB1739, is virtually the same bill that has been introduced in the Illinois General Assembly in the two previous years. It calls for an expansion of casino gaming into the cities of Danville, Rockford, Lake County and the suburbs of Chicago. If passed into law, it would more than double the number of physical gaming locations in the Land of Lincoln from its present ten sites to 23 across the state.
The new twist on the bill, however, is the inclusion of online gaming and poker into the equation. The sponsor of the bill in the Senate, Senator Terry Link (D-Waukegan), included the online gaming language into the bill due to the present factors of the online industry. “You could sit there and do what they are doing right now with offshore betting,” Link stated to the Champaign News-Gazette’s Tom Kacich.
The total revenues generated by the new gaming measures, including online gaming, would be a welcome addition to the Illinois budget. Facing severe shortfalls in its budget and pension funding issues, Kacich states that online gaming and poker could generate up to $150 million per year in revenues for the state. The other areas, such as five new casinos, slot machines and “racinos” (horse tracks with casinos) and gaming in Chicago’s two airports could add up from anywhere to $400 million to $1 billion annually.
The caveat, however, is that Senator Link wants to keep the money at home. “This would be limited to Illinois only,” Senator Link stated to Kacich. “I couldn’t bet with Nevada or New Jersey. It’s for Illinois residents in Illinois.” As the fifth most populated state in the U. S. with nearly 13 million residents, it would be an attractive partner for the interstate compacts that have been discussed by both Nevada and New Jersey for internet gaming.
The path for expansion of gaming in Illinois, be it online or otherwise, has been a difficult one, however. Governor Pat Quinn did sign into law the ability for bars and restaurants to offer video slot machines and poker, but he has vetoed two similar bills to Link’s in the past two years. To attempt to sway Governor Quinn’s opinion on this bill, Senator Link has removed some parts that Governor Quinn requested.
Previous bills had proceeds going to various other projects that had nothing to do with gaming, including contributions to 4-H clubs, soil and water conservation and other organizations. “He (Governor Quinn) took it all out in his proposal and we went along,” Senator Link said to Kacich. Other changes that Senator Link made at Governor Quinn’s request were that a ban would be places on campaign contributions by gaming license holders and that the new operations would fall under the state gaming board.
Many members of the Illinois General Assembly and Governor Quinn weren’t ready to comment on their stance for the bill, but opponents are already stepping forward to express their thoughts. Citing that gaming across the state has dropped by 38%, the executive director of the Illinois Casino Gaming Association, Tom Swoik, sees it as possibly diluting the pool rather than increasing it. “We’re not against expansion,” Swoik stated to Kacich. “We want to see responsible expansion. But at this time we have video gaming up and running, video poker…(adding) the internet is another large component.”
Anita Bedell of the Illinois Church Action on Alcohol and Addiction Problems said, “This is a very bad idea. It’s coming too fast,” citing her concerns on children being easily exposed to gambling with the online factor.
Illinois joins a few states that have started to reexamine their positions regarding online gaming. Both California and Iowa have recently introduced legislation for online poker and Texas is considering the issue. Along with the three players that have already passed legislation for either online gaming, poker or both (Nevada, New Jersey and Delaware), the dominoes are beginning to fall.
Following the path of Nevada and New Jersey legalising online in the last weeks and just 48 hours after Gov. Quinn vetoed a measure to open a casino in Chicago, Illinois introduces an amended bill to expand the state’s land-based gaming operations and introduce internet gambling.
Nevada and New Jersey joined Delaware as the nation’s only states to have passed interstate online gaming legislation. Under the measures, states can form compacts with each other to attract more players and expand jackpot pools. As well as Illinois quickly taking action to introduce a measure, other states such as Massachusetts, California, Iowa and Pennsylvania are weighing possible legislation.
Illinois attempted to similar legislation last year, which would have enabled the state’s current license holders to offer online gaming overseen by the Illinois Lottery. But this was abandoned in June 2012 after the bill’s principal sponsor Sen. John Cullerton pulled the measure, believing that there was not enough support to ensure passage.
This time around, the bill came at a time when state budgets are being issued and it instantly passed a State Executive Committee by a 10-4 margin. During his state budget address on Wednesday, Governor Pat Quinn made it clear that he welcomed gambling expansion under the proper conditions. “Any enhancement that we enact to gaming revenues this year should be dedicated to education,” explained Quinn, after indicating that a substantial $400m would be cut from the state’s education budget.
Quinn has vetoed two previous attempts by state lawmakers to expand gambling in the state, with the most recent earlier this week. “This is a bad bill for the people of Illinois,” Quinn wrote on Monday, but called on legislators “to work with me, my staff, the Illinois Gaming Board, the Illinois Racing Board, the city of Chicago and all other interested parties to ensure that the final version of any gaming legislation includes strong ethical standards and clear regulatory oversight.”
Just two days after the veto message, Senator Terry Link introduced an amended version of SB 1739 that includes procedural guidelines and restrictions aimed at curbing corruption and boosting revenue awarded to education. The measure focuses on the intrastate online gaming model and would establish a Division of Internet Gaming to regulate the sector. Operator and technology vendor licenses would be valid for five years and applications must be accompanied by a non-refundable $250k.
Operators awarded a license in Illinois would have to front $20m as an advanced payment on wagering taxes, which are 20 percent of gross gaming revenue for “non-fee-based games” and 15 percent for “fee-based games”, such as poker. However, for the initial five year period, non-fee-based games would be taxed at 10 percent on the first $200m earned and 20 percent on anything above.
The bill also allows for additional land-based casinos in the state including one in the city of Chicago, as well as slot machines at the city’s airports and Illinois horse racetracks. But this extensive nature of a single bill is enough to prevent the measure and online gaming passing in the state. Quinn has been on record saying that he doesn’t want Chicago to be known as “The Las Vegas of the Midewest”, something he believes the city would have become if the previous bills had been enacted.