Breaking News

Video gambling issue dealt to aldermen

January 13, 2010

News and notes from the Jan. 11 Rockford City Council meeting

By Stuart R. Wahlin

Staff Writer

A week after the Rockford City Council’s Codes and Regulations Committee voted 4-1 against a measure that would exempt the city from the state’s video gambling expansion, the resolution by Ald. Pat Curran (R-2) returned to the council floor with a recommendation that no action be taken. Per procedure, the report was laid over for one week.

The General Assembly passed the Illinois Video Gambling Act last year as one of several funding sources for a $31 billion capital plan after more than a decade without such a plan. The capital bill aims to give the green light to road and other infrastructure projects that have been on hold throughout the state.

An estimated $400 million is earmarked for Winnebago County alone, but that number could decrease as the number of communities—55 municipalities and five counties—opting out of video gambling rises.

Now, aldermen will have to decide whether a video gambling ban within city limits is worth taking dollars away from the state’s construction and jobs program.

Although video gaming machines are already present in establishments throughout the state, they are intended solely for entertainment purposes, but some club and tavern owners privately issue payouts to players without state approval.

That will change once state-regulated machines start appearing in truck stops, bars and private clubs. But for some, video gambling is not a welcome addition to the city.

The Rev. Dr. J. Michael Solberg, senior pastor at Second Congregational United Church of Christ and longtime gambling opponent, referred to the video machines as the “crack cocaine of gambling,” because of their allegedly addictive nature.

“The economics are not the same as other forms of gambling,” he said. “When the General Assembly passed the video gaming act last summer in Springfield, they did not sit down and carefully consider how this form of gambling would affect local communities. They saw dollar signs to support their road construction plan, and they pushed the ‘yes’ button, and that’s about how much thought went into it.”

Solberg also asserted the social costs of video gambling would far outweigh its benefits.

“For every $1 of social gain, there are at least 1.7 dollars—and probably more—of social costs,” he argued. “So, if you want to build a road for a dollar, you’re really paying $1.70 for it. It just doesn’t make economic sense.

“Gambling in general doesn’t add anything to a local economy,” he added. “It doesn’t create anything. It’s not productive. In fact, the evidence shows that for every 40 video gambling machines that come into a community, a million dollars is drained from that local economy.”

According to Solberg, approximately 200 Rockford establishments would be eligible for the machines, which he said would equate to a $20 million drain on the local economy.

Solberg urged aldermen to investigate the facts about video gambling before the matter comes to a vote Jan. 19.

So far, Aldermen Curran and Frank Beach (R-10) are the only clear opponents on the council to video gambling in Rockford.

Committee reports

• Recommending the Police Department award the remaining $25,000 balance of a police consulting services contract to Alex Weiss Consulting. In August 2008, aldermen awarded a $75,000 consulting contract to the now-defunct PAR Group, of Lake Bluff, where Weiss was employed before starting his own consulting firm. Police Chief Chet Epperson studied under Weiss at Northwestern University. Ald. Linda McNeely voted “no.”

• Awarding contracts for automotive parts and supplies to Rock Valley Distributing, of Loves Park, Carquest, and Motor Parts and Equipment.

• Approving a brokerage services agreement with PNC Bank, of Pittsburgh, at a rate of 3-5 basis points per trade.

Resolution

• Approving an Illinois Municipal Retirement Fund (IMRF) out-of-state credit authorization for the Community Development Department’s Bonnie Henry.

Absence

Ald. John Beck (R-12) was absent.

From the Jan. 13-19, 2010 issue.

One Comment

  1. J Michael Solberg

    January 19, 2010 at 10:05 am

    Thank you very much for covering the issue of local video gambling, and for a quality article.

    I’d like clarify a couple of issues raised in your article:

    First, you say “An estimated $400 million is earmarked for Winnebago County alone, but that number could decrease as the number of communities—55 municipalities and five counties—opting out of video gambling rises.”

    That is not really accurate. There is currently $400 million earmarked for Winnebago County, but there is very little chance that that number “could decrease” as more communities opt out of video gambling. Only 25% ($375 million) of the Capital Projects Fund is to come from video gambling revenue, and the state predicted some communities would “opt-out”, and made their video gambling income estimate with that knowledge. The expected number is $375 million, not “$375 million minus whatever we lose be communities opting out.”

    Furthermore, Rockford represents only about 1% of the population of Illinois. If Rockford opts-out, it will have only a minuscule effect on state revenue.

    Also, there is NO provision in the Video Gaming Act that punishes local communities for opting out. If we opt out, we still get the same $400 million.

    Finally, thank you for quoting me accurately in the article. Nice work.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>