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Legalizing what’s already everywhere

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* As you know by now, the Senate overwhelmingly approved the revenue stream yesterday to finance the capital construction program. Included in that stream was legalized video poker at bars, VFW clubs, etc…

Video poker, which would be overseen by the Illinois Gaming Board, attracted virtually no dissent during floor debate despite anti-gambling advocates insisting it will let organized crime flourish and lead to new cases of gambling addiction.

“This would be unregulated mayhem,” said Cook County Sheriff Tom Dart, who has busted illegal video poker machine operations and has said his office receives calls from people whose spouses have lost their paychecks on the machines.

Unregulated mayhem? That’s what we have now with illegal, unregulated machines that are in most every tavern, truck stop and fraternal club in the state. And the Outfit is handsomely profiting off all of it.

The state lottery helped all but kill off the numbers rackets, and taverns could lose their liquor licenses if they kept illegal machines in their places of business now, so we can expect the same fate awaits illegal machines.

* Mayor Daley is in favor…

“Well, everybody thinks gambling is bad. Let’s be realistic, everybody does. But why is it in Mississippi? Why is it all over? It’s even in Illinois. If it’s that bad, then why did we allow it to happen if everybody thinks it’s that bad?”

The city will get a cut from the proceeds, which will help Daley balance his budget. Right now, he’s getting no money from the illegal machines. And since it’s currently a cash business, there’s some question whether bar owners are even paying income tax on it.

Just ten Republicans voted against the revenue stream bill. Ten.

* Good point…

“What I really hope is our Department of Revenue will use this to crack down on the rumor that organized crime has been involved with video poker,” said state Sen. Kirk Dillard, a Hinsdale Republican. “Those machines are already there so we’re not fooling anybody.”

* More from Dart…

“What a mistake,” Dart said after hearing of the vote. “This is a horrible idea because this is a form of gambling that by its very nature is very addictive… You are going to have guys dropping their whole paycheck at the bar.”

They already do, and there are no betting limits on the machines now.

* Related…

* Time is right for a state capital construction bill

* Capital plan heads to the House

* Dirty Dozen: Below are the 12 state senators who want the money, but didn’t want to vote for the means to get it

* State senate approves tax, fee hikes for construction

* State Senate legalizes video poker to pay for construction program

* Video gambling passes Senate

* Full house at video poker sites won’t make state flush

* Dump anyone who votes for HB 255

* Illinois budget plan strips sales-tax discount on some items

* IDOT’s road plan focuses on maintaining status quo

* IDOT: Roads expansion hinges on capital bill

* Highway improvement plans: Eisenhower resurfacing on agenda but additional funding could expand upgrade

posted by Rich Miller
Thursday, May 21, 09 @ 9:46 am

Comments

Does Dart have a better way to raise revenue? If so, he needs to let us know asap!

Comment by This Little Piggie Thursday, May 21, 09 @ 9:50 am
People who are going to gamble, will. We might as well keep the gambling money in this state. Despite all the health reports and high tax on smoking, people do it. Same with a bad habit of gambling, people know the odds are against them, yet they do it.

Comment by Third Generation Chicago Native Thursday, May 21, 09 @ 9:53 am
People are responsible for their own money. Gamblers know the risks associated and make conscious decisions to play. There is no reason at all for the state to leave these machines unregulated and untaxed. Good for the state.

Now, work on allowing true land-based casinos.

Comment by Fan of the Game Thursday, May 21, 09 @ 10:00 am
Gambling expansion is one of the toughest votes a conscientious legislator makes during a career. The vote dances along a not so bright line dividing the “Mommy State” from grownup individual responsibility. It’s easy to convince yourself that people should be responsible for their behavior, but then you go to any of the river boat casinos and see the zombie-like patrons feeding the machines. The reality is that it’s a tax on human frailty and ignorance.

Comment by Louis Howe Thursday, May 21, 09 @ 10:01 am
It’s nonsense that these are already in almost every tavern and bar. I’ve been in enough taverns and bars to know that much.

I think it’s pretty insulting to say almost every tavern in Illinois is Mob-uped.

And how hard would it be for law enforcement to sit outside a place and wait for the big burly collector to come in once a week or whatever, to the places that do have an illegal operation?

This is a cop out by spineless legislators. It’s the state deciding to prey on the poorest of the poor, instead of doing their jobs as lawmakers and making the tough decisions. That’s what they get paid for.

This video poker is a really bad thing. They don’t call it video crack for nothing.

Comment by just sayin Thursday, May 21, 09 @ 10:05 am
{taverns could lose their liquor licenses if they kept illegal machines in their places of business now}

Unless the statute specifically defines a legal vs. illegal machine now, there are no “illegal machines” per se now. The machines themselves are legal, its the process of paying out the customer, based on the game outcomes, which is illegal. That is why this scheme is so hard to police right now. If the new statute does not specifically ban all machines, other than those operated by the state, then we now have the mob and the state in direct competition with each other, but the regulatory challenges remain essentially the same.

Comment by Quinn T. Sential Thursday, May 21, 09 @ 10:06 am
The answer to Richard Daley’s insultingly dumb question (”if gambling is so bad, why did we allow it to happen?”) is simple: you wanted a hidden regressive tax rather than cut patronage or have to make your case to the voters for honest revenue. The gambling tax proponents are as bad as George W. Bush on science or immigration reform advocates on economics — they substitute wishful thinking for reality.

That said, a good argument for expanding legalized gambling is the libertarian one: don’t be a nannystate, let people do what they want if they aren’t hurting anyone. Well, ok, but then why don’t we keep the tax revenues local — have the money from video poker go to that bar’s/resturaunt’s local school district, which is likely to be more in need.

More importantly, this BUBBLE will POP — Congress is already talking about legalizing online gaming, which will mean the ads will flood back onto radio. There is not an unlimited amount of gaming income to be had. You can milk the cow one or two more times (e.g., a Chicago casino — sorry Indiana schools) but it’s not a limitless source.

Comment by lake county democrat Thursday, May 21, 09 @ 10:09 am
Sheriff Dart is mistaken. If we pass the bill we wouldn’t have unregulated mayhem…we’d have regulated mayhem…

Comment by Commonsense in Illinois Thursday, May 21, 09 @ 10:11 am
Just sayin, they are in a lot of bars and taverns. Maybe not the classy joints you frequent, but I’d say they are in 80 percent of the bars in my town.

And all the cops need to do is witness a payoff to a customer - not the bar owner paying off the machine owner. The cops have looked the way for years and years - for good reason. It’s relatively harmless.

Comment by Stuck with Sen. CPA Thursday, May 21, 09 @ 10:12 am
Dart has really missed the mark on this one. Big time fumble.

Comment by EmptySuitParade Thursday, May 21, 09 @ 10:13 am
Maybe if Sheriff Dart wanted to have a say on legislation he should have stayed a legislator. But instead he is the Sheriff who seems to pick and chose when he inforces the law. When have any of his people made an arrest for these machines being paid out on. Hit a neighborhood bar in the 18th or 19th Ward and they pay out. He would know that growing up in that area. Get back to work Tom.

Comment by WOW Thursday, May 21, 09 @ 10:14 am
Of course, it’s easy to convince myself that people should be responsible for their behavior. If not they, then who?

Further, the state doesn’t prey on the “poorest of the poor.” The state forces no one to buy a lottery ticket, slip a quarter in the slot, lay chips on the table. People–both rich and poor–decide on their own whether to do so.

Comment by Fan of the Game Thursday, May 21, 09 @ 10:16 am
“What I really hope is our Department of Revenue will use this to crack down on the rumor that organized crime has been involved with video poker,” said state Sen. Kirk Dillard, a Hinsdale Republican. “Those machines are already there so we’re not fooling anybody.”

Rumor?
http://www.suntimes.com/special_sections/crime/37622,cst-nws-mobvid18r.article

Comment by Steve Thursday, May 21, 09 @ 10:17 am
I agree with ‘just sayin’. They are not in every bar. But they will be. The franchises and hotel don’t have them now, but they will. The hotel I am in right now probably has four liquor licenses. One for the restaurant, banquet room, room service and the cafe. So thats 20 new ones right there.
I am not against expanding gaming but I don’t think it should be passed with bs. The $2 limit per bet? Please. Anyone who has ever played a slot machine or boxed a bet at the track knows that the limit means nothing. You just make multiple $2 bets at the same time. Plus losing $2 every twenty seconds adds up to real money pretty quickly.
On another note the city of Chicago does make some money on these machines. They tack a $250 license fee on each machine and they say there are 10,000 in the city. So Daley does make a couple of million off of them already but obviously not as much as he will.

Comment by Been There Thursday, May 21, 09 @ 10:20 am
Working in the retail wine and spirits industry, I know how badly this 90% tax increase will hurt the industry. Illinois is one of probably three states you can get cheap liquor in. People that have to travel to Illinois from states with government controlled liquor stores often buy cases of what they want to last them 6 months until they can come back to Illinois. If you think this type of business will be static with these tax hikes, you are sorely mistaken. I won’t even mention the business lost of people who live in Illinois. But that always seems to be the problem with government projections. They don’t take into account how many people will cut/end their wine and spirits consumption and mess up your tax hike. It was the same with the cigarette tax hikes.

Now, I am sure the neo-prohibition groups are out celebrating. It is a sad victory for them. But, that is the way these groups always seem to work: tax it out of existence.

Note to State Senators: Your budget is screwed up, you don’t know how to fix it, so I guess you just have to punish everyone else. Thanks for the redistribution of grief.

Comment by Heartless Libertarian Thursday, May 21, 09 @ 10:20 am
Given the ethical standards in the state of IL, I wonder how long it will be until we find corruption in this legalized gambling expansion. Not long I would venture. Personally, I am appalled at the raise of sales taxes and fees. We are being nickle/dimed to death between the local, state and federal government raises to taxes and fees. I am glad I live close to a state border where I can escape some of the state taxes at least.

Comment by Just a Citizen Thursday, May 21, 09 @ 10:21 am
===Note to State Senators: Your budget is screwed up, you don’t know how to fix it, so I guess you just have to punish everyone else.===

This isn’t about the budget. Take a breath.

Comment by Rich Miller Thursday, May 21, 09 @ 10:23 am
===They don’t call it video crack for nothing.===

Actually, you’re quoting Rod Blagojevich. Feel better?

Comment by Rich Miller Thursday, May 21, 09 @ 10:25 am
Sorry, Rich. You are right. It is not about the budget, it is worse. It is about lawmakers’ pet projects in the capital bill… my bad.

Comment by Heartless Libertarian Thursday, May 21, 09 @ 10:28 am
Since we’re “legalizing what’s already everywhere” does this mean pot is next on the list?

Comment by Bluefish Thursday, May 21, 09 @ 10:29 am
So is new standard going to be….its already being done, so why don’t we tax it?……

Lets compile a long list of currently illegal activities that should be taxed…..
We can start with the categories under the seven deadly sins… Pride, Envy, Gluttony, Lust, Anger, Greed and Sloth. Gambling falls under greed. What will be next?

This forum seems to operate on the principle that the State needs money and business as usual will continue, so lets apply the Willie Sutton Rule….go to where the money flows and tax the heck out of it.

How about a 10% tax on all political contributions? Each politician pays the state 10% of all monies collected by their campaign committees. Furthermore the State income tax should apply to the balances maintained in all campaign coffers.

If I have to pay taxes on my income and expenditures as well as profits from my investments, why should they get a free ride?

Comment by Plutocrat03 Thursday, May 21, 09 @ 10:39 am
this is sort of a win win for Dart. really. the machine gets the machines. and he has long been with the machine. but he gets to create more “reformer” credentials. and set himself apart from that from which he was born. it’s funny when the rumors go round about Dart running against Stroger because his family was/is so close to the Strogers.

what’s the title of the new terminator movie? rise of the machines?

Comment by Amy Thursday, May 21, 09 @ 10:39 am
Plutocrat03, gambling is already legal in several forms in this state.

Comment by Rich Miller Thursday, May 21, 09 @ 10:48 am
Most of the bars that have the machines only have one. I could be wrong but the bill would allow for 5. The real kicker will be in the restaurants and snack shops which will load up on the games and stay open 24 hours. You’ll probably see snack shops open side by side under different store names just so they can have 5 machines in each. Dart is not wrong on this. This will be a runaway train.

On a positive note, most of the guys I know that feed all their money into these machines are in the trades so maybe the capitol bill will keep them employed so the can feed the machines so they can keep employed so they can feed the machines so they can keep employed….

Comment by Phineas J. Whoopee Thursday, May 21, 09 @ 10:59 am
Daley - ”if gambling is so bad, why did we allow it to happen?”

Things were so less hypocritical when the mob was running gambling.

Comment by Leroy Thursday, May 21, 09 @ 11:05 am
I find Dart’s position curious.

How does state licensing and regulation benefit organized crime? Bloggers here have talked about clubs with more than 100 machines paying out — that’s wide open. There apparently is little interest by law enforcement to investigate. It’s all gravy for any organized crime element.

Give state and local governments a financial interest, and now you have a real-world incentive to crack down on any organized crime participation.

On Fox yesterday, Dart said there never has been an instance where legalizing a widespread illegal activity hurt organized crime. That’s a bizarre statement from a law enforcement official from Chicago. When the Volstead Act was repealed, it was an enormous financial hit to The Outfit, as was the the institution of the state lottery.

Dart sure does have a lot on his plate these days. I’d suggest he step up his patrols and law enforcement activities in those odd stretches of “unincorporated” Cook County under his jurisdiction. Everybody knows that, for decades, if you want to have a good time on the other side of the law, those are good places to start.

Comment by wordslinger Thursday, May 21, 09 @ 11:08 am
Who is the addict here?
If we had balanced budgets, would we be expanding gambling? Why is balancing an out of control state budget to be done in such an obviously unethical and immoral way? Is it OK to take money from citizens because the state government says it will use the money for good? Who is the addict here? Is there any vice a desperate State will not legalize in order to get their cut?

“Because I need the money”, says the hooker.
“Because I need the money”, says the moonshiner.
“Because I need the money”, says the pot dealer.
“Because I need the money”, says the meth cooker.
“Because we need the money”, says the governor.

How about trying to reform government so that it doesn’t take addicts to keep it functioning?

Comment by VanillaMan Thursday, May 21, 09 @ 11:09 am
Maybe I missed it in the bill - but the bill doesn’t allow municipalities to take more than $25.00 for each machine. They get no cut of the “deal”. If that is wrong - someone tell me/

Comment by What? Thursday, May 21, 09 @ 11:09 am
I thought that we were talking about an expansion of gambling based on the argument that its already there, so lets tax it.

I am focusing on the thinking behind the expansion and what it will mean for other illegal activities that can be taxed.

The legislature has run out of palatable taxes to raise or enact. I am curious how far they are willing to go.

Since no politician will ever wish to tax themselves, we need to prepare a citizens initiative to tax the politicians like they tax us.

Comment by Plutocrat03 Thursday, May 21, 09 @ 11:13 am
What?, they get 5 percent of the take.

Comment by Rich Miller Thursday, May 21, 09 @ 11:13 am
==guys dropping their whole paycheck==
This has been happening for decades, at least now the Outfit will get less of a cut and players may get fairer odds. Current machines have a setting to control payout, just like any slot machine.

==video crack==…==Actually, you’re quoting Rod Blagojevich==
Could Blago have been protecting some of his old cronies, since his numbers job probably got killed by the daily lottery back in the day?

Comment by Vote Quimby! Thursday, May 21, 09 @ 11:13 am
===Since no politician will ever wish to tax themselves, we need to prepare a citizens initiative to tax the politicians like they tax us.===

What a stupid comment. You don’t think they pay income, sales, property, etc. taxes? If they play a video poker machine, will they be exempt from the taxes?

Comment by Rich Miller Thursday, May 21, 09 @ 11:14 am
VM

You said it so much better than I would have. We the state of Illinois really needs to see who is the addict? I think it is our government.

Comment by Boscobud Thursday, May 21, 09 @ 11:19 am
The mob has the recourses, the know how and the infrastructure to jump into legalized video poker with both feet and make even more millions than they presently do but now they won’t be the mob- they will be businessmen.

Comment by Phineas J. Whoopee Thursday, May 21, 09 @ 11:24 am
==Sheriff Dart is mistaken. If we pass the bill we wouldn’t have unregulated mayhem…we’d have regulated mayhem… ==

You haven’t actually read the bill, obviously.

Comment by Anon Thursday, May 21, 09 @ 11:54 am
Right now, I see about 34 comments on the revenue side of the capital bill, and none about the content. Does anyone care?

Comment by Six Degrees of Separation Thursday, May 21, 09 @ 11:55 am
Politicians do not pay any kind of tax on the millions of dollars of donations to their campaigns. This money is used to promote their quests for public office. i.e. personal betterment.

It is stupid not to tax this river of money when the legislators are changing the definition of candy so that it can be taxed at a higher rate.

Comment by Plutocrat03 Thursday, May 21, 09 @ 12:09 pm
===It is stupid not to tax this river of mone===

Yeah, so they have to raise even more money from even more special interests. Brilliant idea.

Simple solutions are neither.

Comment by Rich Miller Thursday, May 21, 09 @ 12:13 pm
We currently get solutions from simpletons and you see where that has gotten the State. The self serving and self dealing would be funny if it were not so tragic. How about a excess profits tax on the magic deals that net millions of dollars to administration insiders like the one for the minority representation in the Chicago parking meter scam?

For all the falderal about regressive taxation, can you get more regressive than the gambling taxes? According to the Chicago Defender in FY 2008, six out of the top 10 revenue producing zip codes had a majority black population. The Defender’s conclusion is that the Lottery is bad for the members of those communities.

I will ask my question another way. Is there no activity the legislators are not willing to tax in their chase for money? If so what constitutes the basis for that line and is that line fixed, or infinitely variable?

Comment by Plutocrat03 Thursday, May 21, 09 @ 12:41 pm
– The Defender’s conclusion is that the Lottery is bad for the members of those communities.–

Pluto, again, things are not always so simple. Back in the day, when the numbers racket was illegal, the Defender was a partner in the policy wheels, serving as the official source of winning numbers.

Once again, I recommend Nathan Thompson’s book “Kings, The True Story of Chicago’s Policy Kings and Numbers Racketeers.” If you can’t find the book, you can get some decent hits by googling “Chicago Policy Wheel, Ted Roe, Ed Jones.”

It’s the story of how the black South Side gangsters ran the numbers racket, and plowed the money back into the community by investments in legitimate businesses.

It also tells how Sam Giancanna made a name for himself by taking it over for The Outfit — and taking the money out of the community –through kidnapping and murder.

Great yarns in the book from Ted “Double Duty” Radcliffe.

Comment by wordslinger Thursday, May 21, 09 @ 12:59 pm
===can you get more regressive than the gambling taxes? ===

Nobody deducts slot machine tokens from your paycheck. Please.

Comment by Rich Miller Thursday, May 21, 09 @ 1:04 pm
If the state truly has an $11 billion dollar operating deficit, then it should not raise $1.1 billion via five new taxes to go deeper into debt for capital projects that could be put off for a time. If a family is buried with credit card and mortgage debt, it should not borrow more money to buy a new car, but should just get the old car to make it through another year. Any new money should go to pay down any operating deficit. This capital bill is a huge mistake in this economy. It’s hard to believe that the Senators were all praising each other, as if they had done something wonderful. Even if it is needed and desired, the state just can’t afford it now.

Comment by Legaleagle Thursday, May 21, 09 @ 1:14 pm
Isn’t it ironic?

Illinois, one of the most corrupt state’s in the nation gets a new Governor who appoints a commission that recommends several reforms.

Instead of adopting the reforms, we expand legal gambling to have mini casinos on every block to raise billions of dollars for our suspect politicians to dole out.

Meanwhile reform bills appear headed nowhere.

Illinois ain’t ready for reform yet.

Comment by Phineas J. Whoopee Thursday, May 21, 09 @ 1:54 pm
Louis Howe summed it up best. This is one of those deep grey areas.

This has to be the best summation of the issue I have ever seen “The reality is that it’s a tax on human frailty and ignorance.”

Comment by Ghost Thursday, May 21, 09 @ 1:58 pm
If the Liquor Commission were required by law to revoke a license for a first offense, or even a second offense, of video poker gambling, then this would not have gotten out of hand. That is where the problem lies.

Comment by Elliott Ness Thursday, May 21, 09 @ 2:03 pm
Legaleagle, your analysis is a little too two dinmensional.

If a family is in credit card debt etc, but they can purchase a new car and get half of the cost covered by the federal government, and the new car will generate revenue for their family because the people being paid to build it will send tox money to cover the debt, will spend money in the family restraunt to increase their profits from the busienss etc; then they are not simply adding debt to debt, they are spending some money in order to recieve free money and stimulate an increase in their take home pay which is then used to help pay that debt.

If your burried in debt how wise is it to throw away free money and stifle economoci growth when that growth is the key to eliminating the debt?

Comment by Ghost Thursday, May 21, 09 @ 2:22 pm
I’m amazed that JC’s lottery scheme is getting so little attention. He is giving away 5% of gross sales for a lottery that is now running on about 3% of gross. And that is just the tip of the iceburg. Go figure!! Follow the buck.

Comment by FOLLOW THE BUCK Thursday, May 21, 09 @ 2:24 pm
I guess among all the lottery and video poker talk, it’s worth noting that Rep. Sandoval (he of the “Chicagoland is getting shorted” fame) put his Y vote on a plan that unanimously passed the senate, and essentially maintains the 45/55 Chicagoland/downstate highway formula (I think it was more like 47/53) in the capital bill.

Comment by Six Degrees of Separation Thursday, May 21, 09 @ 3:41 pm
This capital bill, which supposedly was the most important piece of pent-up legislation in years, is receiving scant interest here. The 3 bills easily passed the House tonight and await Quinn’s signature. Here’s $26 bil comin at’cha.

Now back to our regularly scheduled nap.

ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ

Comment by Six Degrees of Separation Thursday, May 21, 09 @ 8:12 pm