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Video gaming could be a huge revenue generator for state, Chicago

Monday, Sep 26, 2016

* The Southern

According to the Illinois Gaming Machine Operators Association, and reports from the Illinois Gaming Board, video gaming has generated about $785 million in state and local tax revenues since the first machines went live in September 2012.

In the beginning, there were only 13 establishments throughout the state with about 60 machines, and now there are more than 24,000 machines and more than 5,600 restaurants, bars, fraternal clubs and other businesses with liquor licenses.

The association says the state brings in more than $22 million a month in taxes from gaming that is meant to support capital infrastructure projects. […]

A study by the operator’s association found video gaming tax revenue could grow to about $500 million a year if the about 150 municipalities that don’t allow video gaming jump in the game. The association said that number doesn’t include the city of Chicago, which doesn’t allow video gaming. It says, with the largest city in Illinois, the numbers could reach $700 million a year.

So video gaming for Chicago would generate $200 million a year in tax revenues? And it would tend to benefit the city’s hundreds of small, family-owned taverns and restaurants instead of just a few rich folks if they put a big casino downtown?

Why not do both?

- Posted by Rich Miller        

25 Comments
  1. - anon - Monday, Sep 26, 16 @ 10:36 am:

    === video gaming has generated about $785 million in state and local tax revenues since the first machines went live in September 2012. ===

    How many $billions did players have to lose to generate that revenue?


  2. - Norseman - Monday, Sep 26, 16 @ 10:44 am:

    === Why not do both? ===

    I agree. However, I’ll put money on the proposition that Rauner will require his poison pills be included before supporting anything.


  3. - Springfield Since '77 - Monday, Sep 26, 16 @ 10:44 am:

    Revenue is always a zero sum game. Someone has to loose for Government to gain.


  4. - TR - Monday, Sep 26, 16 @ 10:51 am:

    Instead of waiting in vain for Springfield to agree to a grand bargain that will give them their casino, Chicago could opt into video gaming tomorrow on their own. Why not do that and get some of the revenue flowing into the pension funds? They can even sunset video gaming if a downtown casino ever gets approved.


  5. - Bobby Catalpa - Monday, Sep 26, 16 @ 10:55 am:

    *yawn*

    Of course this is a great idea. There’s genuine revenue here.

    But because this raises revenue and is good for the state, Rauner will use this as leverage in order to decimate collective bargaining.

    Everybody knows the game now. A good idea is only implemented under Rauner if unions suffer — or, better yet, go away.

    And when the good idea goes away or doesn’t get implemented, Rauner blames Madigan and Madigan’s intransigence. Madigan, in turn, blames Rauner’s extremism.

    We get it now. It’s no surprise.


  6. - plutocrat03 - Monday, Sep 26, 16 @ 10:57 am:

    Since cash if fungible, which current entertainment venues will take a hit with this newly available activity?

    The only up side is that some of the money currently going in to illegal gaming would enter the legal revenue stream.

    Gambling never creates new revenue. It just rearranges the money currently going to entertainment venues.


  7. - Rich Miller - Monday, Sep 26, 16 @ 11:00 am:

    ===which current entertainment venues===

    I can think of a few in Indiana…


  8. - steves schnorf - Monday, Sep 26, 16 @ 11:05 am:

    need to net out what Il casinos will lose


  9. - Tom B. - Monday, Sep 26, 16 @ 11:15 am:

    Then Bruce should come on down to the City Council and ask for it, be prepared to tell us what he would like to do in return.


  10. - SAP - Monday, Sep 26, 16 @ 11:15 am:

    Seems a lot more palatable than another property tax increase.


  11. - Give Me A Break - Monday, Sep 26, 16 @ 11:16 am:

    Maybe people a lot smarter than me can answer this.

    I have never understood why there are no slots at O’Hare. When I look at the large number of people who pass through there every day with many of them wandering around looking for something to do during their layovers.

    I would think that group would not be taking money away from current slot owners and casinos given they are “trapped” at the airport.


  12. - plutocrat03 - Monday, Sep 26, 16 @ 11:22 am:

    The fact that some of the casinos in the surrounding states will lose revenue is a good thing for Illinois revenues.

    However, you will also have to factor in the non gaming entertainment venues in Illinois which will lose patrons (and ultimately jobs) to the new closer gaming activities which will hoover up entertainment cash. This is also likely good for the State revenue stream because gambling is taxed more heavily than other entertainment venues.

    One negative to consider is that the larger gaming venues tend to be owned by entities headquartered outside the state. So while the State wins larger revenues, a large portion of the gaming revenue stream will flow outside the state, further weakening the state economy.


  13. - Dee Lay - Monday, Sep 26, 16 @ 11:31 am:

    I have no love for the gaming cafes that seem to be the driver of the rapid expansion. I’m talking about the Dotty’s, Stella’s, and Katie’s of the world.

    They need to have a residency-type clause built in that states a business cannot apply for a video gaming license once the business has been continually open for 18 months. That will keep the gaming cafes from opening giving small businesses who are already part of the community an advantage.


  14. - Langhorne - Monday, Sep 26, 16 @ 11:35 am:

    “Revenue would grow, even more, if the 150 municipalities that dont currently allow it, participate.”

    Why even speculate on that? Their nonparticipation suits them, and probably that revenue goes elsewhere.


  15. - Langhorne - Monday, Sep 26, 16 @ 11:38 am:

    Sunset the little guys if a big casino comes along.

    Good luck w that. You cant take the garlic out of the soup. Even proposing it creates addl opposition to the big casino, or at least a fight to maintain what they have.


  16. - Brendan - Monday, Sep 26, 16 @ 12:32 pm:

    Has a comparative analysis been done to see what impact (if any) there has been on casino tax revenues since the machines have expanded statewide? Point being - is this ‘new money’ or has it merely changed columns?


  17. - Small town taxpayer - Monday, Sep 26, 16 @ 12:50 pm:

    “And it would tend to benefit the city’s hundreds of small, family-owned taverns and restaurants”

    I would think that much if not all of the money bet at taverns and restaurants with video games would otherwise be spent at other places. Most people save very little and thus what is spent in one place is not spent some place else. I wonder what the ‘cost’ in lost sales tax would be to the City of Chicago?


  18. - Anon - Monday, Sep 26, 16 @ 12:56 pm:

    ===Why not do both?===

    Because of the negatives associated with relying on gambling revenue in the first place.


  19. - OneMan - Monday, Sep 26, 16 @ 1:27 pm:

    The negatives of relying on gaming revenue ship has sailed…

    It would make even more sense to make round 2 (or whatever you wanted to call it) so that the state owned the machines as well. It isn’t going to happen, but it would be a good idea.


  20. - yeah - Monday, Sep 26, 16 @ 1:32 pm:

    The existing Casino licensees do not care for more competition.
    The existing Gaming Tax Rates are not high enough.


  21. - OneMan - Monday, Sep 26, 16 @ 1:43 pm:

    No one in any industry cares for more competition.

    Here would be the OneMan Plan…

    Three more casino licenses — Chicago and the South suburbs within 10 miles of the Indiana border (make it so no one drives from Illinois to Indiana in Chicagoland to gamble. One for Danville.

    Video poker in Chicago, but a pct can vote it self non-gaming just like they can vote themselves dry.

    More out there but….

    The city can operate video poker at the airports and train terminals downtown.

    Give cities a ‘local ownership’ option on the machines, they have the option of being a machine operator if they want. They can not require anyone to use a ‘city machine’ yeah there is some real risk here, but lets put it out there.

    Free up the marketing for the casinos in general.


  22. - SinkingShip - Monday, Sep 26, 16 @ 2:02 pm:

    Video gaming terminals seem to be targeted at lower-income individuals, which creates a revenue stream that runs from the poor to the State/gaming operators. The effect is tapping into a dangerous vice to have the poor disproportionately fund State operations. I’m not a fan.


  23. - Keyser Soze - Monday, Sep 26, 16 @ 2:51 pm:

    I vote for “both.”


  24. - gdubya - Monday, Sep 26, 16 @ 3:41 pm:

    Legalize weed. Does less harm to a society.


  25. - Southside Markie - Monday, Sep 26, 16 @ 4:54 pm:

    “Why not do both.” Because it would dampen Chicago’s chances of getting a major casino. Most casino operators are not going to want the competition. I would like to see figures on how much video gaming has cannibalized Illinois casino revenue.


Sorry, comments for this post are now closed.


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