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Slot machines kill jobs

Mayor Emanuel is promising to spend his new $140 million a year from the Chicago casino he expects on wonderful things that we’ll all love.  While casinos will create some jobs, he tells the Tribune, “the real job growth and economic growth will come from investment” of the city’s take.

It may not be that simple.   Consider the costs.

Every new slot machine at a Chicago casino will destroy one job each year, by taking money out of the consumer economy, according to John Warren Kindt, business professor at the University of Illinois at Champaign Urbana.  Four thousand slots could mean forty thousand lost jobs over a decade.

Each slot machine, conservatively, takes in $100,000 a year.  With the multiplier effect on consumer spending, that means that 4,000 planned slot machines in Chicago will remove $1.2 billion from the consumer economy each year, Kindt said.

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Place your bets

Renewed talk of a casino in Chicago “appears to be just that – talk,” according to a statement from the Task Force to Oppose Gambling for Chicago.

State Representative Lou Lang of Skokie told Crain’s Greg Hinz that he’s introducing yet another version of legislation to expand gambling; WBEZ reports Mayor Emanuel is lobbying legislative leaders for a casino; and a Sun Times editorial is in favor.

“We have lots of talk from a neophyte mayor and a couple suburban legislators, but it’s the same legislators and the same talk we’ve been hearing for years” said Doug Dobmeyer of the task force.

Now they “want to jam a casino down Chicago’s throat” in the final days of the legislative session, he said.  “That move is a joke that will only undermine the new mayor.”

The politically influential casino industry backs a Chicago casino but not four additional casinos around the state which Lang has proposed, Dobmeyer said.  Leave out the additional sites (as the Sun Times suggests) and you lose downstate support, Lang argues.  In addition, a brand new casino opening in Des Plaines just three weeks from now is not going to look favorably on unexpected competition from Chicago.

“This talk is diverting the city and state from finding legitimate ways to plug deficit holes in their budgets,” Dobmeyer said, enumerating a range of proposals including a financial transaction tax and a city income tax.  He points out that New York City has both.  (More here.)

He said a survey during the recent election campaign showed 28.8 percent of aldermanic candidates supported a casino and 42.8 were opposed.  Some 78 percent of candidates supported a referendum on gambling in Chicago before any legislative action.

A Chicago casino would “draw low-income people and problem gamblers to support the gambling business,” Dobmeyer said. “This disrupts a family’s efforts to educate its children and provide the basics of family life, especially during the recession.”

Video poker debates

A Chicago ordinance bans video poker; with the state’s new capital budget funded in part by the legalization of video poker, a push to repeal the local ban is expected.

And with scores of localities moving now to institute bans, “Chicago is the key whether video poker machines will exist in Illinois,” said Rev. Thomas Gray of the national organization Stop Predatory Gambling.

Three forums this week will bring together the Task Force to Oppose Gambling in Chicago and the Illinois Coin Machine Operators Association, joined by Ald. Joe Moore and the Illinois Conference of the United Methodists — Monday, October 19, 7:30 p.m. at Humboldt Park United Methodist Church, 2120 N. Mozart [corrected]; Tuesday, October 20, 12 noon at Chicago Temple, 77 W. Washington; and Wednesday, October 21, 7 p.m. at the Rogers Park Library, 6907 N. Clark.

Video poker: bad bet

Video poker is turning out to be a riskier gamble than Governor Quinn and state legislators thought when they legalized it earlier this year, looking for easy money to fund a public works budget.

They were betting it would add $300 million in state revenues per year.  That now seems unlikely.  Their September 11 deadline for poker video rules from the gaming board has come and gone, the board insisting it’s a far more complex process (involving investigating and approving each proposed location) than the politicians realized, with a much longer timeline.

In the meantime, dozens of towns are considering taking advantage of the law’s provision allowing local bans on video gambling.  DuPage County has banned it in unincorporated areas, and Cook and Will Counties are considering similar actions.

The Tribune just found that 60 percent of Illinois residents oppose video gambling. 

Expanding gambling always looks like the perfect quick-fix solution when budgets are tight, U. of I. business professor John Kindt told the New York Times, “but in the end it so often proves to be neither quick nor a fix.”

Today a number of anti-gambling groups are launching Operation Let The Public Decide, aimed at holding public hearings on video poker in communities around the state — and working to keep in place the ordinance that bans video poker in Chicago.

Ald. Joe Moore, County Commissioner Bridget Gainer, Jane Ramsey of the Jewish Council on Urban Affairs, Rev. Larry Hilkemann of the Northern Illinois Conference of the United Methodists, Nancy Duell of the Anti-Gambling Task Force, and Rev. Tom Grey of Stop Predatory Gambling were slated for a City Hall announcement this morning. 

Gainer has called the $300 million revenue projection “an exaggeration bordering on fantasy.”  Indeed, the Times says Illinois has reported a $166 million drop in gambling-related revenue in the past year.  And much money spent on video poker is money that won’t be spent on the lottery or in casinos.

In Elgin, the League of Women Voters is calling on the city council to ban video poker; the city is studying the issue.  LVW’s Lauren Bault “said gambling is a regressive way to raise revenue that targets the poor. She also said gambling has a low-growth potential and video poker encourages people to play longer, faster and bet more,” the Daily Herald reports.

“Gambling is not a source of revenue that is equitable, progressive, stable and responsible,” Bault said.

In unrelated news, video poker lobbyist Joe Berrios was slated for Cook County Assessor by the Cook County Democratic Party, chaired by video poker lobbyist Joe Berrios.

Missing from budget debate

Personalty conflict is a big part of the state’s budget impasse — but for the major media it’s the only story, and that’s part of the problem.

Take funding for the state’s desperately needed capital budget.  It’s presented largely as a problem between the governor and the mayor over how much the city will pay for a casino franchise.

There’s a lot more to the story, according to Ralph Martire of the Center for Tax and Budget Accountability — a reality that is largely separate from the rhetoric, which is all that seems to get covered.

The vast majority of gaming is in-state, Martire said, and it’s a substitute expenditure — money spent in casinos is not spent at dry cleaners or shoe stores.  But because the majority of casino owners are out-of-state, the profits don’t go back into the local economy, the way money spent at the dry cleaners does.

Compared to public expenditures, which have a large multiplier effect on the local economy — teachers salaries are spent in ways that produce more jobs here — spending on gaming has a significant negative multiplier effect, he said.

Compared to a direct tax — where a dollar for the state costs a taxpayer a dollar — every dollar in gaming revenues for the state costs an Illinois resident five dollars in gambling losses.  And the people providing the revenues are not the wealthiest by far  — they’re low and middle income.

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Yet another casino drive

The latest proposal for a Chicago casino is just “the same old thing — fleece the public,” according to the Task Force to Oppose Gambling in Chicago.

The proposal is part of a plan by former U.S. Representatives Denny Hastert and Glenn Poshard for a state capital budget.

“With a recession hurting the economy, political leaders can only think of more ways to hurt people in need,” said Doug Dobmeyer of the Task Force.

He noted that efforts to bring gambling to Chicago have failed for 19 years.  The Task Force called on the City Council to sponsor a referendum on the Chicago casino proposal.

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.

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