In the fiscal year ending in June, Illinois brought in more tax cash from gambling. That’s just one of a couple of highlights indicated in Monday’s fresh report.
In gambling taxes, the state got about $1.4 billion, an increase of more than 3% for the same period last year. The increase in income is due in part to over 3,000 fresh video gaming terminals that came online this year, bringing an extra $48 million.
With this information alongside other revenue round-ups, the Government Forecasting and Accountability Commission report shows a change in how individuals play. Over the past year, more individuals used video gaming machines, while at casinos and racetracks, fewer bets were placed. Riverboat casinos tax cash fell this year by several million USD and racetracks accounted for only a tiny fraction of the total.
The latest tax information emerges just as Illinois lawmakers gave the go-ahead for six new casinos and legalised sports betting in a broad gambling expansion bill signed back in June. It is anticipated that the move will provide more tax dollars to the state and create employment for local groups.
But Eric Noggle, a government revenue analyst and one of the report’s writers, warned lawmakers and others not to be overly optimistic. He thinks that gambling development may not be the jackpot some have trumpeting based on the tax figures of this year.
“We may, at the end, be slightly disappointed in how much money we’re actually generating from it,” he said. “But, I don’t think it’s going to be something that we’re going to look back [at] and go, ‘we lost revenue on this.’”
The study warned of other states competition and an over-saturation in Illinois could make all the new gambling alternatives less profitable, especially the new casinos.
“We’re investing in something, especially with the casinos, that has been on a downward trend,” Noggle said.
Others have suggested that the high tax structure laid down by law for a coveted casino within the town boundaries of Chicago will ameliorate any agreement and decrease future income. For such an activity, the CGFA report points to an effective tax rate of approximately 72%, with profit margins of just 1-2% to for an operator.
State lawmakers may consider altering that framework during the upcoming veto session to make the casino more attractive.
Meanwhile, five more downstate new casinos permits were endorsed by the state. But a few would be close to the state frontier with either an established procedure, or one that could quickly be opened. To make matters more complicated, Illinois already has 10 casinos, and downstate communities such as Springfield and Decatur already boast thriving video gambling companies.
Noggle pointed out that, generally, fresh casinos may not make a big difference. “Everybody likes to go to a new thing, so I think that the new casinos will do well.” Noggle explained. “But if you’re an existing casino, I have a lot of concern that they are really going to be impacted. The cannibalisation could be significant to these casinos.”
Noggle said he’s optimistic about a newly legalised sports betting network, but when gamblers will be able to place bets is unclear so far. Such gambling is anticipated to offer the state an additional $50 to $100 million a year in tax cash when it is operational.