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Gambling on a capital budget

When Governor Blagojevich approved a regional sales tax hike to fund mass transit operations, it wasn’t the first campaign pledge he’s reversed recently. Just last month he went back on promises in his 2002 and ’06 campaigns to oppose gambling expansion.

Noting that he has “traditionally opposed” gambling expansion, Blagojevich’s spokesperson said December 17 that “in the spirit of compromise” he was “willing to accept at gaming expansion as a better source of revenue than raising taxes on people.”

But it was another “tradition” — the anti-tax pledge — that fell in this week’s compromise. And with the state’s long-deferred capital budget still unaddressed, the Task Force to Oppose Gambling in Chicago is suggesting it’s time to look at alternatives to gambling again.

A bill for massive gambling expansion, HB 4194 — which would add a land-based casino in Chicago, two riverboard casinos, and slot machines at five racetracks, doubling gambling positions in the state — is still on the table; hearings were held in Springfield earlier this month.

But the proposal faces a raft of political difficulties: casinos don’t like the slot machines at racetracks or the stepped-up regulation contained in the bill; downstate legislators aren’t enthusiastic about awarding a casino license to the scandal-plagued City of Chicago in perpetuity, for a fraction of the $800 million that a private entity would pay. Add to the mix the December indictment of Blagojevich’s top gambling advisor — for gambling-linked fraud.

Now the Task Force is questioning the premise of the Governor’s December compromise — that gambling expansion is “a better source of revenue” than taxes. Spokesperson Doug Dobmeyer notes that the quarter-percent income tax hike that’s been discussed as a source of capital funding would cost the average family $110 a year; he contrasts that with the $120 or so that the average casino patron loses in each visit. (In 2006 total gross receipts amounted to an average $118 loss per visit for 16 million casino patrons; last month it averaged $122 for 1.23 million visitors.)

“The bottom line” is that “a tax increase is cheaper than shelling out money to a casino,” said Dobmeyer, adding that it’s more cost-effective too, since the gambling industry doesn’t take a large cut of the revenue.

It also avoids the wide range of social costs associated with gambling.

Dobmeyer said Ald. Joe Moore is preparing to sponsor a citywide referendum asking voters if they support a land-based casino in Chicago, and the Task Force is also supporting Lt. Gov. Patrick Quinn’s call for a statewide referendum on gambling expansion. Dobmeyer points to a recent Capitol Fax report on a survey showing 77 percent of state residents support a referendum on the issue.

HB 4194 “would make Illinois the second largest place in the country for gambling, after Vegas,” he said. “No one has discussed what that would mean….

“We want a referendum and a lot more discussion.”

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Category: gambling, state budget

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