Casino bills taking billions from Illinois education

 Having passed the Illinois Senate on May 17 and pending in the House, Senate Bill 7 would authorize a Chicago Casino Development Authority (CCDA) as a government unto itself via a “perpetual” license with all owned or “leased” property tax exempt. CCDA is legislatively designed to be a self-governing entity with extensive and abusive government powers which would be virtually impossible to regulate or revoke. Furthermore, the license fee for the Chicago casino is set at $50 million, though the legislature has heard repeated testimony that the Wall Street value of such a license is over $1 billion.

SB7 also authorizes four casinos at racetracks plus five other casinos – in Williamson County, South Suburbs, Lake County, Rockford and Danville. Each of these casino licenses is pegged at $100,000 while the combined Wall Street value of these licenses is $3-$6 billion. For example, during the early 1990s, the original 10 Illinois casino licenses worth $5 billion ($13-$15 billion in current dollars) were given away for $25,000 each to political insiders – including one who became a prison insider. Other Midwest states have easily sold similar casino licenses for $300-$500 million each.

Expert testimony before a 2015 congressional hearing noted that the Illinois budget crisis is catalyzed by $35-$100 billion in legislative giveaways that have been diverted away from Illinois education and budgetary necessities and into the pockets of gambling interests since the casinos first opened in 1990.

Sponsored by former U.S. Senator Paul Simon, the U.S. National Gambling Impact Study Commission called for a moratorium on the expansion of any type of gambling anywhere in the U.S. and highlighted that the youth population was experiencing alarming gambling addiction rates paralleling drug addiction. Callously, SB7 also allows gambling facilities to seduce vulnerable youth comprising gambling’s crème market by lifting the restrictions on gambling facilities being located near colleges, day care centers and elementary and secondary schools.

Unlike consumer businesses, SB7 is loaded with tax giveaways to gambling owners via several instances of legislative legerdemain, such as lowering the graduated tax rate on casinos from the current 15 percent to 50 percent on Adjusted Gross Receipts (AGR) down to 10 percent. The Illinois government’s own Commission on Government Forecasting and Accountability (CGFA) has warned in a 2017 report that: “The reduction of the tax rates would negatively affect state revenues.”

Instead of being subject to the Illinois Gaming Board, the Chicago Casino Development Authority would have abusive government powers. But Gov. Bruce Rauner recently stated that he might support SB7 if it were part of a larger “grand bargain.”

Since the late 1980s, proposals for a Chicago casino have faced overwhelming opposition from good government groups, including the Better Government Association, Common Cause and virtually all criminal justice authorities such as the Chicago Crime Commission (originally formed to fight Al Capone).

When Mayor Richard M. Daley’s proposal for a Chicago casino was rejected by a public informed by the investigative press, the same casino companies stated they would take their proposal to Detroit to save the city’s finances and public employees. Casinos thereafter precipitated the financial deterioration of Detroit, which in 2013 became the first major U.S. city to declare bankruptcy.

The investigative press has repeatedly reported that, per definitive academic studies, the socioeconomic costs of gambling facilities to the taxpayers are $3 or more for every $1 in benefits.

For 30 years, Illinois legislators have heard experts testify that the $35-$100 billion siphoned away to gambling owners could and should have been used for education and other budgetary obligations. However, only the Fourth Estate can now educate the State.

For over 30 years, Prof. Kindt has served as a faculty-elected University of Illinois senator dealing with state budget and education issues. He is also a senior editor of the multivolume U.S. International Gaming Report®.