Chicago Sees More Cash From Gambling Despite Fall In Casino Revenue

0
149

Last year, gamblers in the state of Chicago carried more cash into the state than ever before, though casino sales were down.

These were among the results in a fresh wagering income assessment from the Commission on Government Forecasting and Accountability of the state legislature, indicating casino income surpassed $1.4 billion in fiscal 2019, which finished June 30. That’s a 3.5% rise over last year’s haul, representing a $48 million rise in income from fiscal year 2018.

State revenue from casinos was down for the first time in three years, heightening fears from industry insiders and government-funded watchdog groups about the stability of the state’s planned large gambling expansion, including six new casinos. Expansion money is intended to cover road and college construction and infrastructure costs through the “Rebuild Illinois” capital improvement campaign.

Tom Swoik, executive director of the Illinois Casino Gaming Association said: “I don’t think the new legislation is going to generate the kind of revenue they’re thinking it would. I think this report shows what we’ve seen before, which is the revenues of the existing guys are going to go down when the other ones open up. And that’s if they open up at all. I don’t know if there’s as much interest as they anticipated.”

Only Rivers Casino n Des Plaines produced more cash for the state last year than the past year. This year’s other nine casinos netted the state less income.

This year’s gambling income rise is almost exclusively due to the development and growth of state-wide video gambling in the previous year. Video gambling earnings rose last year by $46 million, producing more than $398 million. That’s because 32,033 video entertainment terminals were in service at the close of the fiscal year compared to 29,283 the year before, a 9.4% rise in terminals. According to the study, 33,867 terminals worked throughout the 2019 fiscal year. That’s the equal of 28 casinos, as each casino has a threshold of 1,200 gambling locations. And that’s still without Chicago video gambling slots.

Cook and Lake counties have the state’s largest and second largest amount of video gambling terminals, representing nearly 23 percent of all state machines. The video gambling terminals netted last year’s state median of $12,428, up more than $400 per device from fiscal year 2018, according to the study.

More suburban places, including Buffalo Grove, Lombard, Rolling Meadows and Mount Prospect, have lately reversed video gambling bans, which also helped boost government revenues and predictions.

Commission commentators think that video gambling income will continue to rise as a result of modifications to state legislation that enable places to add a sixth slot, double the highest bet from $2 to $4, and boost the total money prize from $500 to $1,199. Additionally, the fresh legislation provides the government a larger boost in video casino income, adding 3% more from each device this year and another 1% in the next fiscal year. It already gets 25% of each terminal’s revenues.

Changes to the video gambling legislation were component of a bigger gambling extension law that would allow sports wagering at casinos and some of the bigger sporting locations in the state, adding up to three fresh casinos in Chicago and the outskirts, and three others in the state. Expansion is expected to boost gambling income by $1 billion, although some specialists think it is extremely exaggerated. Some casino providers have suggested charges and taxes are too big to profit from opening fresh casinos.

The state income figure also included projections from adding gambling to horse-racing locations such as Arlington International Racecourse, which Churchill Downs managers have so far failed to cite profitability issues. Racetrack’s future is uncertain, but it’s closing would decrease the $6 million in horse racing gambling income the state earned in 2019.

Laurence Msall, head of the Civic Federation, a nonpartisan government research organisation that specialises in Illinois tax and financial policy said: “What is disappointing is there is no established rationale for all types of gambling that would be expanded at once with any type of detailed analysis. It flies in the face of basic economics as to where this new source of gambling attention and appetite is going to come from.”

But state officials stay hopeful about the future of gambling revenue as a source of financing the state’s capital enhancement requirements, stating they expected initial growing pains and incremental recognition.

“The governor worked with the general assembly to pass a bipartisan gaming expansion that was years in the making to create jobs and spur economic development around the state while generating revenue to rebuild our universities, community colleges and hospitals,” said Jordan Abudayyeh, a spokeswoman for Gov. J.B. Pritzker. “The administration understood the unpredictable nature of gaming revenue and took that into consideration when putting together the revenue projections for Rebuild Illinois.”

Lottery sales are the state’s final component of gambling revenue, the single largest portion. Money from the lottery helps fund state education. Last year, the state got $735 million from lottery purchases, up $3 million from the previous year, the commission’s study says.

 

 

 

LEAVE A REPLY

Please enter your comment!
Please enter your name here