Guest Column: Time to put the brakes on further gaming expansion

Tom Swoik
Tom Swoik

By Tom Swoik
Executive Director, Illinois Casino Gaming Association

It has been two years since the first legal video slot machines were installed in Illinois. In just 24 months, more than 18,000 slot machines have been installed at more than 4,700 locations. As a result of this growth, Illinois now has double the locations licensed to conduct gaming as Nevada.

While the video gaming industry wants to proclaim success, we should not gloss over the challenges caused by this explosion of gaming. As with any law, a number of entrepreneurs have taken advantage of loopholes that allow slot machines in “casino cafés” in strip malls, laundromats and gas stations. At these locations, important rules that prevent compulsive gamblers from playing the slots are impossible to enforce.

Gaming at these large chains of casino cafés, as well as some of the other locations, was not the intent of video gaming. As officials weigh reasonable regulations to rein in the excesses of the law, they should also rule out further gaming expansion.

State tax revenues generated by neighborhood slots are going to pay for things already built under the 2009 capital program. While the video gaming industry touts the tax revenue the state is receiving, they want you to overlook that casino taxes, which are earmarked for education, are falling as a result of this expansion of gaming into our neighborhoods.

Given the prevalence of video slots, casino admissions are down 1.2 million from last year, and total taxes generated have fallen $29 million. Compared to the same point in 2012, before video slots were active, casino admissions are down 2.1 million, and total taxes generated have fallen by $57 million.

The explosion of video gaming is proof the state can drastically increase gaming positions, yet end up with little or less gaming tax revenue for education. Despite all of this, calls to further expand gaming are coming from Illinois’ horse racing industry. They claim slots at tracks will be the savior of their sport, overlooking the broader national decline in the popularity of the pastime. If tracks were given slots, tax revenue for education from casinos would further decline.

The calls for assistance from the racing industry are nothing new. Over the years, they have asked lawmakers to change laws to help rekindle the sport in Illinois, ranging from intertrack wagering, simulcasting, advanced deposit wagering and a 1999 tax break package.

The industry’s most audacious request was for direct cash infusions from state funds to reverse its fortunes. Over the past two years, the racing industry has received $167 million in state tax dollars to revive its sport.

In 2012, tracks received $144 million from a special tax assessment on some casinos that proponents claimed would propel Illinois’ tracks to second or third in the nation. It’s clear that didn’t happen, as track revenue fell, even after that sizable cash infusion.

Then, last June, Illinois’ racing industry received another $23 million from the state treasury. That’s money that wasn’t spent on school construction, teachers or helping offset property tax increases for education.

After all this money was infused into the sport, the racing industry says they still can’t make it work. So, after burning through $167 million in incentives, the industry wants to pass a large gaming expansion bill that uses thousands of slot machines to subsidize the sport that, in turn, will take money away from local government budgets and classrooms. This is something we simply cannot afford.

Tom Swoik is executive director of the Illinois Casino Gaming Association, an industry association based in Springfield, Illinois.

From the Dec. 3-9, 2014, issue

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