Category Archives: Gaming

Gov.’s Gaming Blueprint Deserves a Fair Deal

By Emily Miller
Emily is the BGA’s Policy and Government Affairs Coordinator. Contact her at emiller@bettergov.org.

As he was threatening to veto a bill authorizing a massive expansion of gambling in Illinois, Gov. Pat Quinn was also releasing a “framework for gaming”—his blueprint for fixing what, from his perspective, ails the General Assembly’s latest legislative attempt to swell the ranks of casinos, slot machines and gambling venues.

(conorwithonen/CC)

When the BGA recently examined the mammoth gaming bill, SB 744, it found a dismal lack of solid research and analysis behind the bill’s contention that more gaming will result in a jobs and revenue bonanza for Illinois. So the BGA called on Quinn not to consider backing the bill without an exhaustive, in-depth examination of the legislation’s details, including: economic risks and rewards; social costs; the impact of Chicago owning its own casino; and the ability of regulators to prevent an infusion of gaming-related criminal activity.

Overall, the Governor’s office did what the BGA suggested after the gaming bill was passed with no public hearings during the waning days of the last General Assembly session. Over the summer, Quinn’s staff spoke with scores of public interest groups, including the BGA, community leaders, anti-gaming forces and pro-gambling interests. After completing the due diligence, Quinn threatened his veto, explaining there are faulty assumptions in the current bill, and other elements he can’t support.

The issues include:

  • Revenue windfall. The Governor’s office determined the gaming expansion was not targeted in the best possible way to pull gamblers away from neighboring states while minimizing the potentially negative impact of new gambling venues on current casino towns. In other words, he didn’t buy the pro-gaming hype.
  • Limiting gaming growth. Quinn has proposed a smaller and more targeted gaming expansion. He favors cutting the number of new casinos to five from the 14 authorized by SB 744. He wants to eliminate slot machines at both major airports in Chicago and all 7 “racinos,” including the Illinois State Fairgrounds.
  • Regulatory, contracting woes. Quinn’s analysis also highlighted a number of regulatory shortcomings in SB 744, including the fact that the Illinois Gaming Board lacks the time, authority and resources to thwart corruption
  • Banning campaign cash. To curb potential conflicts of interest and improper influence, Quinn’s office has also proposed banning contributions to lawmakers from gaming licensees and casino managers, a policy that’s already in effect in Iowa, Michigan, and Indiana.

The work of the governor’s office demonstrates a lot of time, effort and research went into the analysis, and that’s something the BGA hasn’t seen from any of the other governmental entities involved in legislation with such sweeping implications for Illinois.

This week during the fall veto session, Senate President John Cullerton said the gaming expansion bill was on hold and that he would soon be hammering out details of a new gaming bill with the governor. Lawmakers have the chance to give Quinn’s framework the same thoughtful consideration he gave to the original gaming proposal.

Let’s hope political maneuverings and ambitions don’t get in the way of a real public dialogue about the impact gaming expansion will have on Illinois.

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Gaming, ‘Smart Grid’ Bills Top Illinois Veto Session Agenda

By Emily Miller
Emily is the BGA’s Policy and Government Affairs Coordinator. Contact her at emiller@bettergov.org.

The Illinois General Assembly reconvenes every fall for a two-week “veto session.”

Technically, state lawmakers are supposed to consider bills the Governor has rejected, but it’s not unusual for other initiatives to surface and be voted upon during this legislative get-together.

So what will lawmakers be focusing on? Here’s what’s likely to be considered:

(conorwithonen/CC)

Gaming expansion
One high-profile issue legislators will address is statewide gambling expansion, a measure the General Assembly approved in the closing days of the last regular session.

Although Governor Quinn never received the actual bill, he signaled he would veto it should it arrive on his desk. As an alternative to that proposed veto, Quinn recently suggested ways the gambling expansion bill could be amended to maximize revenue and increase regulation in what he dubbed a “Framework for Gaming in Illinois.”

The BGA pressed the governor not to approve any gambling expansion bill without more public discussion and community input. The BGA is also concerned the state does not fully understand the economic impact of gaming expansion and is relying on outdated or faulty revenue projections.

A spokesman for Senate President John Cullerton, who held back the original gaming bill from Quinn, told the BGA that passing a compromise bill that works for both the gaming industry and the Governor is among Cullerton’s top veto session priorities.

President Cullerton intends to prove Quinn’s “framework” is not a workable proposal by giving lawmakers the chance to vote on a bill that closely mirrors Quinn’s proposal. Cullerton’s hope is that the failure of the bill will bring Quinn to the negotiating table.

However, the Governor has repeatedly said he is not interested in hammering out such a compromise—and strongly believes his “framework” is the smartest and best plan for Illinois, and anything less is unacceptable.

Insiders doubt a compromise bill can pass, especially one that does not include so-called “racinos,” or casinos at racetracks—a piece of the original legislation the Governor opposes.

Removing pieces of a bill that was carefully calibrated to satisfy all the specialized interests found in the gaming industry would almost certainly lead to the bill’s demise.

Will the "smart grid" bill make it out of Springfield?

ComEd and Ameren’s “smart grid”
The wheels have already started turning to override Governor Quinn’s high-profile veto of the so-called ComEd “smart grid” bill.

Under the legislation, ComEd and Ameren avoid independent regulation and lock in rate hikes over the next decade to pay for a system upgrade that, they say, will make Illinois energy delivery more reliable and competitive.

Unlikely proponents include environmental groups, who signed on in support of the measure in exchange for the inclusion of renewable energy and improved efficiency standards. The bill’s opponents, including the AARP, Attorney General Lisa Madigan, and Lieutenant Gov. Sheila Simon, argue the legislation allows ComEd and Ameren to bypass state regulation, leaving consumers vulnerable.

A so-called “trailer bill,” touted by proponents as a fix to many of the Governor’s concerns regarding consumer protection, was pushed by the industry and passed out of the Senate on Tuesday.

Expect ComEd and Ameren to keep pushing to get both the trailer bill and the veto override through the Senate this week, so they can focus on getting the measure through the House during the second week of veto session.

A BGA investigation found that in the months leading up to the Illinois General Assembly’s approval of the controversial energy bill, utility giants ComEd and Ameren, and their executives and affiliates, donated more than $1.3 million to campaign funds benefiting state lawmakers.

Chicago Board of Trade Building (puroticorico/CC)

Tax incentives for Illinois futures industry
A spokesman for Senate President John Cullerton said Monday that lowering the state’s corporate income tax rate for the Chicago Mercantile Exchange (CME), the Chicago Board of Trade (CBOT) and the Chicago Board Options Exchange (CBOE) to keep their business in Illinois is a top priority for the veto session.

A spokeswoman for Republican Senate Leader Christine Radogno characterized the measure as part of a larger jobs initiative—one that includes other incentives to keep companies like Sears in Illinois. She does, however, have reservations about speeding the measure through the General Assembly before its full impact is known.

But Crain’s Chicago Business political columnist Greg Hinz reports that the deal that gives the exchanges a 50 percent reduction in their tax rate would reduce state revenue by $100 million a year. As Crain’s points out, the CME, one of the slated recipients of this corporate tax break, saw more than $900 million in profits last year alone.

House Majority Leader Barbara Flynn Currie questioned whether the bill was even necessary, according to Crain’s.

But Chicago’s Mayor Emanuel strongly supports the incentive. If Senate President Cullerton can sweeten the deal enough for Senate Republicans to support the measure, Mayor Emanuel may be able to use his influence with Chicago-area lawmakers to push the measure out of the House.

Abolishing Legislative Scholarships
Though the legislative scholarships program—which allows lawmakers to hand out scholarships for state schools to anyone in their district—has been under a microscope in recent months following reports of misuse by some lawmakers, it is unlikely this program will be abolished during veto session.

Governor Quinn attempted to abolish the program by adding language to a bill he vetoed—a move House Speaker Madigan deemed an unconstitutional overreach of the executive office. Attempts by Senate Republican Leader Radogno to pass a bill abolishing the program have been quashed by Senate President Cullerton.

The Governor’s staff says the issue is a top priority for him this veto session. But if neither Speaker Madigan nor President Cullerton is interested in moving the bill, it will go nowhere.

In August, a BGA/Chicago Sun-Times investigation revealed how State Rep. Dan Burke’s ex-secretary’s daughter received a legislative scholarship, despite questions regarding her residency in his district. The FBI is looking into the grant.

Facility Closures
This summer, Governor Quinn announced that a state budget shortfall of $376 million lead to his decision to close mental health and prison facilities around the state.

He has blamed the cuts on lawmakers who failed to give him a budget sufficient to pay for a whole year of expenses, and has encouraged lawmakers to fill in the budget gap during veto session to prevent the closures.

Since his announcement, the American Federation of State and Municipal Employees (AFSCME) has been trying to shore up enough votes for appropriations to prevent closure of the facilities.

It’s not out of the question for the General Assembly to come up with the cash to fully fund the facilities for the rest of the year, which would bring the closure proceedings to a halt.

Illinois’ Unpaid Debt and Public Pension Reform—the Elephants in the Room

Two of the biggest problems facing Illinois are its backlog of unpaid bills and the need to reform public pensions. But most don’t expect either of these issues to move this fall in Springfield.

None of the legislative leaders we spoke to cited eliminating the backlog of debt as a priority for veto session. It’s not likely that any plan will emerge in the coming weeks to address the issue.

Similarly, it’s not likely that major pension reform—one of the most pressing and divisive political issues facing lawmakers—will move at all.

While House Republican Leader Tom Cross has introduced measures that would eliminate some pension loopholes, few lawmakers expect any large-scale pension reform bill to get a vote in the veto session.

Sooner or later, Illinois legislative leaders will have to address both of these issues, but it’s not likely they will do so this fall.

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BGA Members to Quinn: Get the Facts Before You Ante Up

When lawmakers hear directly from constituents through faxes, emails and phone calls, they understand the issues that really matter to the people they represent. The BGA’s e-advocacy tool connects our members and followers directly to lawmakers to make sure better government is always on the agenda.

Flickr--Zdenko Zivkovic

Lawmakers passed a sweeping gambling expansion, and the Governor has to decide whether to sign it. But no current data on the economic impact of the proposal exists.

Today we’re calling on BGA members and followers to urge Governor Quinn to get all the facts before he signs the bill.

Lawmakers recently approved a massive gambling expansion that includes a city-owned casino in Chicago, new casinos in four other locations and slot machines in airports and racetracks. Supporters are hoping Governor Pat Quinn will sign the measure when it lands on his desk.

>> The Better Government Association says not so fast.

We don’t oppose gambling or a Chicago casino per se, but no data exists to show what economic impact this bill will have in communities across the state, or how the City of Chicago would grapple with being the only city in the state to own a casino.

>> We need Governor Quinn to form a task force that will issue a report with an accurate projection of jobs, revenues, economic and social costs that go along with a gaming expansion.

The task force should also take a look at the oversight laid out in the bill, and make sure the public is adequately shielded from the criminal activity that invariably accompanies gambling

Without satisfactory answers to these questions the governor should do whatever is necessary to keep this bill from becoming law.

>> Click here to urge the Governor to demand all the facts before he signs the gambling expansion.

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IL Gambling Expansion: Andy Shaw Voices BGA’s Concerns in Aug. 4 Chicago Tribune

Earlier this summer, the BGA began shining a light on controversial legislation in Springfield that would dramatically expand gaming in Illinois. To push the process toward more transparency, and to better educate the public, we:

Here’s the full-version:

Before Expanding Gambling, Let’s Get All the Facts

By Andy Shaw, president & CEO,  BGA

Flickr--Zdenko Zivkovic

In the final days of the spring legislative session the Illinois General Assembly passed a bill authorizing a massive expansion of gambling in Illinois that includes a city-owned casino in Chicago, casinos in four other locations and the installation of slot machines in airports and racetracks.

Senate Bill 744 is expected to reach Gov. Pat Quinn’s desk in the next month, and supporters are hoping that he signs it into law by October. The Better Government Association is not among them.

The BGA agrees with numerous critics of the bill, including the Tribune and the chairman of the Illinois Gaming Board, that this is a deeply flawed piece of legislation that should not become law until a much-needed fact-finding mission is completed.

The potential ramifications of the bill should be addressed, analyzed, discussed and debated openly and thoroughly so it’s better understood by the governor and the public. That, unfortunately, never happened in the rush-to-passage at the end of the legislative session.

For the record, the BGA is not ideologically opposed to an expansion of gambling, or a Chicago casino.

But the BGA is troubled by the hurried process that churned out a mammoth bill of breathtaking proportions. As a result the BGA proposes:

  • Forming an independent, fact-finding group. The governor should immediately appoint a review board, task force or commission mandated by Executive Order to explore the economic and social implications of SB 744. The group should produce a comprehensive report before the bill arrives on Quinn’s desk.
  • Soliciting meaningful public input. The legislature dealt the public out of this hand. Although the gambling expansion issue is not new to Illinois, SB 744 smacks of a “rush to judgment” that was passed without adequate due diligence. Public hearings should definitely be an integral part of the governor’s fact-finding task force.
  • Providing credible, independent economic research. There is a dismal lack of trustworthy economic research and data behind this bill, and it’s irresponsible not to assess its impact on Chicago and other communities throughout Illinois. The public deserves direct answers to some simple but crucial questions, including: What is the economic impact of new casinos around the state and the addition of so many more slot machines? What is the market demand for more gaming in Chicago and downstate markets and cities, especially now that video poker has been green-lighted by the Illinois Supreme Court? How many new jobs will really be created by the expansion? And what kind of jobs? Will state revenues actually increase or just be shifted away from other entertainment venues? What are the anticipated social costs?
    Governor Quinn should marshal the resources of his government, including the Departments of Revenue and Commerce and Economic Development, along with experts from state universities and research from other states and municipalities to provide credible answers. Relying on outdated research, or studies produced by partisan forces, makes for bad decisions.
  • Explaining the risks to taxpayers. SB744 enables the City of Chicago to own a casino license. What are the risks to the city’s “shareholders”–the taxpayers–if a casino runs into financial trouble or goes bust? At the end of the day, would taxpayers be forced to bail out a failed casino? What are the rewards to the taxpayers of a city-owned casino? The people have a right to know their level of exposure or return on investment from this bill.
  • Protecting against crime. Will the public be properly protected from the criminal activity and influence that always seem to surface when gambling is involved? Can and will the state invest the resources needed to regulate, investigate and oversee the gambling concerns that enter or expand in Illinois?

These are essential questions that merit thoughtful examination in the context of the additional strain the expansion would place on the state’s existing gambling regulatory system. Aaron Jaffe, the head of the Illinois Gaming Board, the state’s top gaming regulator, has voiced serious doubts about SB744 and questions the ability of his agency to properly scrutinize more gaming vendors while also overseeing the legalization of video poker in other parts of the state.

To address these serious concerns, the BGA is recommending Gov. Quinn act fast and get the pertinent information and real answers necessary to complete the fact-finding process the General Assembly failed to deliver.

Absent credible, reliable and satisfactory data to support each of these preconditions, the Governor should take whatever steps are necessary to prevent this bill from becoming law.

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POLL: Expand Illinois Gambling?

Image courtesy joelk75/Flickr

A bill to expand gambling in Illinois and authorize a Chicago casino was recently passed by the General Assembly. Now, Governor Pat Quinn must decide whether to sign the bill into law, kill it with a veto, or rewrite and change the legislation.

But BGA followers won’t have to wait for Quinn’s decision. You can weigh in on the gambling issue right now by taking the BGA Online Poll, which asks:

For more information, make sure to check out our Illinois Gaming Expansion Bill FAQ. And find out more about the June 29 BGA Forum on the proposal for a Chicago casino.

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BGA Forum Shines Light On Controversial Gambling Bill

The Illinois General Assembly recently passed Senate Bill 744, a controversial proposal designed to dramatically expand gaming in Illinois and pave the way for a Chicago casino.

The bill, which the Legislature passed on May 31, will go before Gov. Quinn, who has yet to say what action he will take.

To shine a light on this legislation, the BGA, in partnership with the Union League Club of Chicago, recently hosted the first major public discussion of the gaming expansion bill. The event centered on a panel discussion featuring two supporters and two opponents of the measure, including the bill’s sponsor, Illinois State Representative Lou Lang (D-16).

From left: Illinois State Rep. Lou Lang, Michael Mini, Director of Government Relations for the Chicagoland Chamber of Commerce, Anita Bedell, Exec. Dir. of Illinois Church Action on Alcohol and Addiction Problems, and Rev. Phil Blackwell of First United Methodist Church at the Chicago Temple

Andy Shaw, the BGA president and CEO, moderated the June 29 panel discussion, noting that the event was an important initial step toward informing Illinois residents about this critical issue. In addition, Emily Miller, the BGA’s policy and government affairs coordinator, outlined the content of the bill.

If signed by Gov. Quinn, the bill would increase gaming positions in the state’s racetracks and Riverboat casinos. In addition to Chicago, four other areas would receive casino licenses—Park City, Danville, Rockford and a location in southern Cook County.

But Chicago would feel the biggest impact of the bill’s passage into law.

Indeed, a land-based casino would push Chicago over Philadelphia for the title of largest U.S. city to hold a casino within its limits.

Under the proposed legislation, 4,000 gaming positions—a seat at a table or chair at a slot—would initially be available in Chicago. But according to a BGA analysis, that number could swiftly increase, doubling or even tripling in future years, due to a “use or lose clause.” A Chicago casino could feasibly scoop up unused positions from across the state.

NOTE: A "gaming position" is equivalent to 1 seat (of 5) at a blackjack/poker table; 1 spot (of 10) at a craps table; or roughly 1 electronic gaming/slot machine seat. Illinois is the only state to define its gambling restrictions using this term, as opposed to square feet, table, or revenue limitations.

>> Arguments For/Against the Bill
On the panel, Rep. Lang argued that his bill is a catalyst for economic development, claiming that new gaming would generate $1.6 billion in state revenues and 90,000 jobs in the gaming industry. Michael Mini, Director of Government Relations for the Chicagoland Chamber of Commerce, which favors the bill, urged Gov. Quinn to sign the legislation, noting that it would boost Chicago tourism.

Anita Bedell, Executive Director of Illinois Church Action on Alcohol and Addiction Problems, and Rev. Phil Blackwell of First United Methodist Church at the Chicago Temple, came out against passing the bill, saying it would result in widespread gaming expansion that will prove socially and economically damaging to Illinois residents.

“If you have local residents gambling and losing money,” Bedell said, “that’s less money they’ll be spending in retail, on cars, on homes on food.”

Rep. Lang countered that Illinois gamblers are already spending dollars elsewhere, crossing state borders to Wisconsin and Indiana. “These social costs will endure and be here whether or not we pass this bill,” he said, “because the people from our city, our county, our community are going elsewhere and they’re still gambling.”

Regulating the expanded gaming business was also a hot-button issue. The bill would create a new regulatory Authority in Chicago, filled with appointees from the Mayor.

Rev. Blackwell expressed concern that the bidding process for the casino is open to corruption. But Rep. Lang insisted that the Illinois Gaming Authority has been ethically sound, and future regulatory bodies will follow the same pathway.

Audience members also had questions for the panel— to learn more, read our FAQ: IL Gaming Expansion Bill.

Rep Lang stressed that he wants Gov. Quinn to sign the bill and make it the law of the land.

However, the governor has three major choices:

  • He can sign Senate Bill 744 into law;
  • He can rewrite and change parts of it and return it to the General Assembly, which must uphold or reject those alterations; or
  • He can “veto” and kill the bill outright.

There is another possible maneuver: Quinn and lawmakers can agree to make changes to Senate Bill 744 in a so-called “trailer” bill, which is then passed and signed into law at the same time Senate Bill 744 is signed into law.

Right now, Gov. Quinn is not tipping his hand and is only saying he wants to get feedback from everyone who has an opinion on the bill.

The BGA’s Shaw has stressed that this gaming issue requires more public discussion, adding that the BGA will continue to push for greater community dialogue and deeper understanding of this controversial issue.

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FAQ: The IL Gaming Expansion Bill

Image courtesy joelkk75/Flickr

This spring, lawmakers passed a large scale gambling expansion bill that will head to Governor Quinn’s desk for him to approve or reject sometime in the coming months.

Proponents argue that gaming—a legal industry in Illinois—is a much-needed revenue source that Illinois is currently losing out on by sending people to neighboring states to gamble.

Opponents argue that gaming provides a revenue stream that comes from those who can least afford it, and that this proposal was passed without sufficient public discussion to ensure a transparent and accountable process.

But what’s actually in the gambling expansion proposal lawmakers approved in May?

Q: What’s the big picture?

  • Five new casino licenses in Illinois (Chicago, Park City, Danville, Rockford, South Suburban Cook)
  • An increase in the number of gaming positions at each of the existing nine casinos
  • A new year round racetrack at the Illinois Fairgrounds
  • Slot machines at all racetracks

Q: Where in Chicago can gambling occur?

The measure is ambiguous as to whether there is a limit on the number of locations where gambling can occur. Gambling could occur at:

  • a riverboat on Lake Michigan
  • O’Hare and Midway (slot machines only)
  • a new landbased casino structure
  • and the possibility of multiple smaller gambling locations throughout the city, such as hotels.

Q: Who oversees gambling in Chicago?

  • The Chicago Casino Development Authority
  • Board members are appointed by Chicago’s Mayor.
  • The Authority is separate from the Illinois Gaming Board.

Q: What ethics laws are included?

  • All employees and board members of the Authority are barred from gambling in any Illinois facility.
  • Employees and their family members are prohibited from having conflicts of interest, including financial interests in contractors or subcontractors.
  • A revolving door prohibition exists for employees and board members.
  • After leaving employment at the Authority, they can’t be employed by a contractor they did over $25,000 worth of business with for two years.

Q: What licenses and fees are associated with the proposal?

  • New casino licenses cost $100,000.
  • Each gaming position inside of Cook County costs $25,000. Each gaming position outside of Cook County costs $12,500.
  • After four years, license owners must pay a fee based on their highest 12 months of revenue.
  • Tax rates for gambling revenues decrease.

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