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* Could Chris Kelly’s indictment kill the gaming expansion bill? I’m not so sure, but my syndicated column this week takes up the issue…
It could have been worse, I guess. Gov. Rod Blagojevich wasn’t named or even alluded to in last week’s federal tax fraud indictment of one of his best friends, closest advisers and biggest fundraisers, Chris Kelly. Blagojevich does appear to be fingered in a different indictment, but that got lost in the shuffle.
Whatever, last week wasn’t good. Blagojevich now is in the awkward position of pushing for a massive gambling expansion while the political world discovers the last time the governor did so, in 2003, he put his buddy Kelly in charge of the project.
* The Daily Herald emphasized Speaker Madigan’s statement last week in its look at the issue…
The political fallout from the indictment of Gov. Rod Blagojevich’s friend and gambling adviser began Friday as a potential vote next week on a massive state gambling expansion was canceled.
House Speaker Michael Madigan, a Chicago Democrat, sent a letter to lawmakers saying “in light of subsequent developments this week, the legislative process will be better served by holding session on these topics at a later date.”
* Another take from the DH…
With Gov. Rod Blagojevich’s gambling point man now accused of placing millions of dollars in illegal bets and breaking the law to cover it up, state lawmakers face the question of whether they’re willing to entrust Blagojevich with a massive gambling expansion plan.
“Given how close Mr. Kelly is to the governor as an adviser … it certainly gives you pause,” said state Rep. Paul Froehlich, a Schaumburg Democrat, expressing a sentiment shared by many suburban lawmakers.
* But some expansion proponents are skeptical…
[Senate President Emil Jones] spokeswoman Cindy Davidsmeyer insisted she didn’t see how the Kelly indictment might affect ongoing consideration of gambling expansion by state leaders.
“The indictment is a personal matter,” she said.
* And Finke, who often reflects convetional press room wisdom in his column, doesn’t think the gaming bill would pass anyway…
In fact, the latest gambling bill was already in a world of hurt before the Kelly indictment was made public. Representatives from both parties had a number of problems with the bill - how much Chicago would have to pay the state for a casino license, how to ensure minority investment, how to handle slot machines at horse racing tracks, and on and on. The feeling among many was the bill was going to fail in the House if it was called for a vote. The Kelly indictment gave Madigan a convenient excuse to avoid that vote.
* Crain’s looks at Detroit as an example of how a Chicago casnio might not do as well as advertised…
Three casinos near downtown Detroit, the first of which opened in 1999, have done little to attract more visitors or otherwise boost the city’s struggling economy, according to Donald Holecek, a Michigan State University professor emeritus of tourism development. “People would come in for a day and stay in the casino,” he says.
Chicago casino boosters cite a potential impact of as much as $950 million a year in annual revenue and 2,500 new jobs from a casino with 4,000 gambling positions, figures that could grow to $1.2 billion and 3,200 jobs for the hospitality industry as a whole. But critics say much of that would not be new money.
“The good thing (about casinos) is they make a lot of money,” says William Thompson, a University of Nevada at Las Vegas professor of public administration. Casinos “pay a lot of taxes. The bad thing is they make the money off local residents. It’s a zero-sum game.”
Thoughts?
posted by Rich Miller
Monday, Dec 17, 07 @ 10:57 am
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Judging by the way the two houses were feuding over it, I thought this gaming bill was dead before the Kelly indictment. To me it’s already been cremated.
By the way, that is a good thing. Illinois is clearly not ready to expand gambling.
Comment by Garp Monday, Dec 17, 07 @ 11:31 am
It would be great to have a sober look at all the promises made by the gambling proponents.
All we have to do is look at the impacts from casino gambling in our own state in Joliet, E. St. Louis and Aurora to see what the future will bring. Even a large rollers like Atlantic City has not improved the local area.
As usual, the proponents of this massively bad idea have dollar signs in their eyes, while they ignore history.
The simple prediction for the future is that the new revenue will not meet expectations, the social costs will be higher than predicted and local entertainment and restaurant revenue will drop or have their growth reduced.
Meanwhile the politicians will continue their unabated inefficient spending and start looking for new revenue streams.
Comment by plutocrat03 Monday, Dec 17, 07 @ 11:36 am
As African American, i side more with Madigan’s proposal for the minority investor opportunity. Too often we see the same old faces in these deals. i don’t think it’s shady, i just think they are the people with the means. Madigan’s proposal opens it up for new faces.
This is the right time to get this bill passed. The Republican minority needs to agree to something, becasue their leverage quickly evaporates next month.
Most important, you have to be out of your mind to compare anything in Detroit to anything in Chicago. Detroit is trying it’s best to be a third rate city, where as Chicago is a top tier on a global level. There’s a reason why so few of us have any opinion of a Detroit casino; there’s no reason to go to Detroit.
Suck it up and pass Madigan’s bill now.
Comment by B-no name nickname needed Monday, Dec 17, 07 @ 12:08 pm
So let’s assume for a minute that the gaming bill is dead. What does that mean for transit funding? Under the current calculus without casino expansion there will be no capital bill, without capital bill there will be no agreement on SB 572. Doomsday is January 20th. The question amongst transit advocates is this, “with the death of the gaming bill, will the leaders finally de-couple transit from the mix and allow a vote?” If the house passes it in January, will Jones take it up in the senate? Will the Governor still veto? Unless Jones and the Governor reverse their stance, we can count on drastic cuts in transit service and increased fares for sure.
Comment by pjs Monday, Dec 17, 07 @ 12:27 pm
Agreed, comparing Detroit with the prospects for a downtown Chicago casino is just silly, Ask Nevada if gambling is a zero sum game.
Comment by steve schnorf Monday, Dec 17, 07 @ 12:42 pm
@ Steve Schnorf
I don’t want to live in the Las Vegas of the midwest. And Las Vegas is about the only successful model to point to. Reno and Atlantic City are distant seconds, and it’s not like they’re doing great.
I saw one estimate that said a person is going to have to lose between 4 and 5 dollars for the state to get 1 dollar for education, transit, and the million other things they’re promising. And I still don’t understand how the promise to get a casino built ASAP equals funding for any of those things in the next six months to a year.
Comment by Sacks Romana Monday, Dec 17, 07 @ 1:15 pm
Steve: Regarding your wondering about getting the cash quickly, think bonds, it is likely they would be sold and the future income pledged to pay them back. How scary is that?
Comment by Chillimon Monday, Dec 17, 07 @ 1:24 pm
You’re all familiar with the acronym “NIMBY” which means “No In My Back Yard”. People love to have waste disposal/prisons/factories/etc., but Not In My Back Yard. Ultimately thought, someone, somewhere needs to suck it up, and give up their back yard.
I’d like to propose an analog: “NFMBP” (pronounced “NIFF-em-BIP”) “Not From My Back Pocket.” We want all the great things that government brings us, transit, health care, jobs . . but Not From My Back Pocket — someone else needs to pay for it. Well, you know what, we may well be in a situation where the best and only solution is for us as a State to suck it up and pay. From our own back pockets. There, I’ve said it.
Comment by What planet is he from again? Monday, Dec 17, 07 @ 1:24 pm
Yes, let’s be more like Nevada:
Worst public education outside of the deep South.
Highest suicide rate.
Highest bankruptcy rate.
Highest divorce rate.
Gambling solves so many problems.
Comment by phocion Monday, Dec 17, 07 @ 1:48 pm
It all depends on where it is sited. Detroit’s problem is that for a casino to be successful it needs to have something to feed off of — e.g. a major interstate nearby or a lot of pedestrian traffic in the neighborhood generated by other things to do already. In Detroit’s case, no one wants to get off the interstate, and the neighborhood is non-existent. Neither of those will be a problem in Chicago; however, I question how much the average Chicago visitor is going to want to sit in front of a slot. They can do that in Joliet or Hammond or Vegas. And even if the Chicago casino is a go, simply shuffling revenue from Joliet to Chicago doesn’t help the state.
Comment by Angry Chicagoan Monday, Dec 17, 07 @ 1:49 pm
Emil’s gaming bill is dead.
Madigan’s Christmas Tree + Reform is on life support, just like he likes it. Much easier to terminate the patient that way.
Merry Fitzmas, Blagojegrinch.
Comment by Yellow Dog Democrat Monday, Dec 17, 07 @ 2:36 pm
Gambling shamling, when will the Chris Kelly, Emil Jones, Terry Rekco and Blagojevich Team come up with a real solution.
Comment by Golly Ggee Wilakers Monday, Dec 17, 07 @ 2:40 pm
I doubt that anyone belives that the Speaker thinks the gaming bill will not pass because the Gov’s fundraiser is in trouble for tax evasion.
Comment by really now Monday, Dec 17, 07 @ 2:45 pm
I suspect bonds wouldn’t have much trouble being sold with casino revenues pledged as source of debt service. The coverage would be extremely good. Depending on how much you wanted to sell, you could end up pledging only 1/4 or 1/2 of the revenue. But I don’t think any of that proceeds from a sale should ever be used for operating expenses.
Use one time revenue (bonds, license sale, fees for new slots at boats and tracks, etc) for one time and/or first year costs, revenues could start flowing fairly quickly from expanded slots. The casino(s) would take longer, but it could be structured without a lot of problem, I think.
Comment by steve schnorf Monday, Dec 17, 07 @ 2:46 pm
all you negativists about gambling expansion need to be ready to support a major tax increase, because spending ain’t coming down!
Comment by steve schnorf Monday, Dec 17, 07 @ 2:49 pm
Raise my income taxes, PLEASE!
Comment by Yellow Dog Democrat Monday, Dec 17, 07 @ 2:58 pm
I caught Sen Black and House Rep Lang together on CBS2 Chicago news the other day. These two could barely agree on camera, which I think goes a long way with how disagreements behind chamber doors are going. Where both gentlemen had their points, I don’t see gambling going anywhere very quickly.
Comment by Princeville Monday, Dec 17, 07 @ 3:01 pm
Steve -
Perhaps we could slice a little off of the Gov’s travel budget, just for kicks?
Maybe we could start using open source software, instead of forking millions over to Microsoft each year?
I know that there’s not enough fat to balance the budget, but I think we could trim enough to restore public faith and earn broader support for a tax increase.
Keep in mind, a majority of voters already support an income tax increase, provided the money is split between education and property tax relief.
Comment by Yellow Dog Democrat Monday, Dec 17, 07 @ 3:02 pm
As Illinois has one of the lowest income tax rates in the nation, it’s no great burden to increase them and finally solve our structural financial crisis.
Comment by phocion Monday, Dec 17, 07 @ 3:03 pm
I only wish Blago would raise taxes instead of just deluding himself into believing we can afford his programs-of-the-month.
The Crain’s article about the Detroit casinos is interesting, but not a valid comparison. In Detroit gaming money is probably all they get in terms of tourism. In Chicago, it would be gravy because tourism, shopping, dining and theater are all very healthy and growing. I’m sure a Chicago casino would do much better than Detroit’s because we already have the tourists.
Comment by Napoleon has left the building Monday, Dec 17, 07 @ 3:07 pm
Gambling does not enhance an already thriving tourism industry. It cannabilizes. If you’re going to go to downtown Chicago for a night out, are you really going to go to a museum, then to a restaurant, then go to a show, then go to a casino? The casino will draw in the visitors, and spit then out only after they’ve emptied their pockets.
Comment by phocion Monday, Dec 17, 07 @ 3:17 pm
And Black and Lang are two of the best legislators!
Dog, as you know, we can always cut spending a little somewhere, and usually do, but as we know, we’re way past that point.
Comment by steve schnorf Monday, Dec 17, 07 @ 3:18 pm
To build a gambling resort such as “Lost Wages” NV took the mob and mob discipline a generation and one half, It was for the longest time the only industry in town. It is now an honest game, well managed by the State and the mob has submitted because it keeps giving birth to golden eggs. The corporate Mob is in on it now as well. Its continuing lineup of international acts continues to attract, even though it was originally just a set of drawa to bring the people in.
Lost Wages has a whole set of hotel casino businesses, and the high rollers who get comped in from the Far East spend billions to be entertained and lose money. McCarron Airport is busy seven days a week three hundred sixty five days a year with incoming and outgoing planes scheduled to match with the two, three and four day visitors, who bunk in at the hotels and check out in time for the rooms to be cleaned and fresh sheeted for the newbies.
Even with the O’Hare airport expansion we could not handle the additional load necessary to fill the new hotels, whose casinos are in every lobby.
We are talking fuzznuts — a single huge Casino in Chicago, one in the south suburbs and the ones in Indiana, from the Wisconsin tribal venues and on the river.
And if it is the low rollers from Illinois — as it is likely to be– there aren’t enough parking lots at any site. Lost Wages has everybody connected to a monorail, and if you don’t like the show at the Mirage, there is another one nearby. You can eat different cuisine for four days and never leave the lobby. Velvet and golden chains. The slots may pay 96% but it is the turnover that is lucrative.
You truly want a gambling destination then build five casinos, attract teh big spenders willing to stay in a flying tube for another three hours if you can.
Otherwise stop kidding ourselves that this does anything more than rely on Illinois suckers out for a good time.
If that is so then
1) Give them at least as good odds as they do in Indiana, Wisconsin and Iowa;
2) Put in a sports book;
3) Ramp up the Entertainment District instead of taxing commerce to the death Our theaters are doing fine with the shows they now have, no room for tourists except on a small scale, unless you want to have a second showing at 11:00 p.m.
Gambling used as a public source of local tax revenue is more regressive than the sales tax. It will most certainly take money away from the Illinois lottery, including the scratch ‘em and weep games. At best the people will lose no more than they do now on the legal gambling the State sucks them in on.
The only profitable game in town is the political game, where their elected representatives provide for bread and circuses in exchange for permanent election. Only the lobyists go home rich, but politicians surely like the pensions they have earned by spending our money.
Comment by Truthful James Monday, Dec 17, 07 @ 3:31 pm
they will bond the gas tax for capitol and then replenish the road fund with the gaming income. This dysfunctional legislature will eventually do mass transit and capitol, but not until the end of January. The two issues can not be de-coupled. There aren’t 60 votes in the House without capitol. Even the Speak can’t get his downstaters to vote for a CTA bailout bill without bringing home a new curb or bridge.
Comment by ivoted4judy Monday, Dec 17, 07 @ 3:38 pm
Dollars spent by visitors or residents in Chicago casinos will be dollars they don’t spend at restaurants, theaters, bars, movies, ballgames, etc. My guess is a push in overall tax collections.
There won’t be any great expansion of the Entertainment Dollar Pie in Chicago — there will just be another slice. The ones to get hurt will be the suburban and Indiana casinos.
The ones to get rich will be the insiders who finance, build and operate the Chicago casino.
Comment by wordslinger Monday, Dec 17, 07 @ 3:57 pm
OMG
We just lost ouf motion to stike the Devil Madigan motion to dismiss our special session law suit. Can’t these judges get it right — ever?
Quick get the SpinSisters out there to coverup this failure. Thank goodness their credibility was reaffirmed by winning the CaptFax Award
Let’s plan a big bash in Mexico as soon as DiceK gets his passport back.
Comment by DumberThanYouThink Monday, Dec 17, 07 @ 4:03 pm
Wordslinger, doee that mean the people who own and operate the other Illinois casinos will get poor? I guess I just don’t expect to see any firesale prices from current owners. Does that mean overall casino tax revenue to the State won’t increase with a Chicago casino? Assuming the marginal tax rates don’t go up to 70 again, I think I would be willing to bet on that one.
Comment by steve schnorf Monday, Dec 17, 07 @ 4:04 pm
Steve Schnorf, my guess is no one will get “poor,” whatever that means. If your games are set up right, the house will always profit, no matter how much action you’re taking.
But I suspect that existing area casinos will see a loss in action due to competition from a Chicago casino. The Quad-City Times had an editorial over the weekend that a Chicago casino would kill a proposed expansion of the Jumer’s in Rock Island.
You’re correct, perhaps, that overall state casino revenues will go up with a Chicago casino, but I would wager that tax collections from other Entertainment Dollar sources would go down.
I don’t think a Chicago casino will bring in more tourists, conventions or gamblers. Where are they coming from?
Comment by wordslinger Monday, Dec 17, 07 @ 4:16 pm
A casino can and should be located in Chicago… The Mayor, business and civic leaders are in agreement but it appears that Madigan continues to drag his feet, looking for any excuse he can to not move the ball forward. We need a capital bill, we need to fund transit. The expansion of gaming is the piece that makes this all come together - Senate R’s and D’s, House R’s, and even most of Madigan’s members agree. Madigan needs to negotiate in good faith so we can solve these issues.
Comment by FlackerBacker Monday, Dec 17, 07 @ 4:16 pm
I predict the Hamos mass transit bill will pass in January when it is eventually decoupled from the fate of the capital/casino bill. Senator Jones will not be able to block a vote on the Hamos bill in the Senate, when push comes to shove.
The Governor will not veto the Hamos bill when it reaches his desk becasue he thinks he still has a political future, which would be obliterated the moment he vetos it. Gubernatorial principles will be subordinated to political survival instincts.
Comment by Captain America Monday, Dec 17, 07 @ 4:32 pm
Here’s another budget idea: don’t hire Deloitte for their phony “government consolidation” advice — and get rid of the all the “shared service” initiatives in CMS and BCCS that are draining away what little agency dollars agencies now have.
Comment by Macbeth Monday, Dec 17, 07 @ 4:47 pm
Here we go again with the ‘low income tax’ argument.
It’s not just the income tax, Its the income tax, the property tax the transfer taxes, the use taxes…. Illinois ranks in the top quartile in taxes and the third quartile in services.
The graft and patronage in the Illinois budget is legion. so Steve S, What do you mean there is no where to cut?
Comment by plutocrat03 Monday, Dec 17, 07 @ 5:01 pm
Pluto, please read more carefully. I didn’t say nowhere to cut, I said spending isn’t going down, and it isn’t.
Comment by steve schnorf Monday, Dec 17, 07 @ 5:13 pm
The recent bad publicity has made Rod a lame duck and puts Emil Jones out on a limb with no backup from the Hairdo. I think we’re going to see the Blago-Jones wonder team crumble soon. Jones just has to figure out a way to distance himself from the mess and pin it all on the governor.
Gambling should stand or fall on its own merits, decoupled from capital. it is being shoved down the throat of an electorate that doesn’t really want it, but is always being fed the false choice that it is gambling or nothing.
Gambling expansion is not creating new revenue. It is a parasite on state citizen’s capital, feeding on money that’s already here, that could have been put to more productive use building things, purchasing services, creating jobs, being invested in property. Gambling is a tax on the future, on all our futures.
Comment by Hang your Hat at Mister Kelly's Monday, Dec 17, 07 @ 5:24 pm
Those of us who are part of Illinois’ overtaxed middle class understand that more money may have to be raised, as our highly corrupt state political system seems incapable of putting itself on a diet, likely because most politicians benefit hugely from all the money sloshing around.
We just don’t think we should have to pay it.
Put in a progressive tax and let the rich pay the increase. They probably wouldn’t even complain that much although their many apologists likely would.
Comment by Cassandra Monday, Dec 17, 07 @ 5:36 pm
Back to ya Steve
By not demanding that wasteful spending be curtailed, you encourage politics as usual.
If the voters do not encourage the pols to cut, then they won’t.
To say we have to raise taxes because the spending will not go down is a cop out.
Comment by plutocrat03 Monday, Dec 17, 07 @ 8:47 pm
If Chris Kelly hadn’t got caught, the gaming bill would of passed and Chris Kelly’s debts would have forgiven?
Comment by You Betcha Monday, Dec 17, 07 @ 9:05 pm
the train has left the station and Daley will not be denied this cash cow..he’ll let the CTA crumble but gaming revenue will come to the rescue…
Comment by Loop Lady Tuesday, Dec 18, 07 @ 7:38 am
Pluto, (aka King Canute, ordering the tides to recede). You, I, we, anyone who wants to, can demand as loudly and often as they like, state spending in this state isn’t going down (unless we just start deferring more of our bills) At best, hope for a reasonable rate of growth, which would be harder than hell to achieve.
You confuse stating the truth with endorsing the truth of a particular matter (e.g., abortion is legal in the United States). All you have to do is do the math to see that state spending isn’t going down.
Comment by steve schnorf Wednesday, Dec 19, 07 @ 12:05 am