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HomeGamesOnline Casino Singapore deal is bad for state, says lawmaker

Online Casino Singapore deal is bad for state, says lawmaker

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Struggling to overcome objections by regulators, backers of the stalled Rosemont casino project may face another problem: complaints from an influential pro-gambling legislator that the casino could be the most profitable in the Chicago area but generate the least revenue for the state treasury.

 

State Sen. Robert Molaro (D-Chicago) says he will ask lawmakers in the General Assembly’s fall veto session to rewrite special provisions of a 1999 state gambling law that earmarked less than 15 percent of Rosemont casino revenue for the treasury, ostensibly to pay for education programs. The share of revenue that goes to the state from Illinois’s nine existing casinos is roughly double that.

 

Under a compromise reached to pass the 1999 law, the Rosemont casino would be taxed by the state at the same rate as other gambling boats. But, more than half of the Rosemont tax money would be diverted to the horse racing industry as a subsidy to compensate it for lost revenue caused by competition from casinos.

 

Molaro, a member of a Senate committee that oversees gambling issues, said he has talked to several Republicans and Democrats in the legislature about the 1999 law and few were aware they had rendered Rosemont far less lucrative for the state than other casinos.

 

If Rosemont eventually gets the green light, regulators expect it to reap annual revenue of $400 million, more than any of its competitors. State fiscal experts estimate that would translate into about $111 million annually for the state if the horse money weren’t subtracted.

 

As the law stands now, however, the racing industry would get $60 million of that money, reducing the take for the state to $43 million. Another $8 million would go to Cook County.

 

Molaro said he still backs the subsidy but thinks it shouldn’t come out of the state’s share of the pot. He wants the formula changed so the state will keep its full share of Rosemont revenue and the subsidy will be deducted from the owners’ take, rendering the casino less profitable.

 

“The question is, does the 15 percent come from the owners who are going to have the best license in history or should the 15 percent come from the state? I think the public overwhelmingly would say it should come from the owners,” Molaro said.

 

The Online Casino Singapore owners can afford it, he said.

 

“Let me tell you this, if you own 1 percent of the Rosemont casino, your great-grandchildren won’t have to work,” Molaro said.

 

Kevin Flynn, chief executive officer of the Emerald Casino group that is seeking the license, could not be reached for comment.

 

The Illinois Gaming Board in January rejected the Emerald’s license bid, contending the top officials of the ownership group provided false information to regulators, contracted with a mob-related vendor and sold shares to two investors with alleged ties to organized crime.

 

The Emerald is currently locked in legal, administrative and political battles to overturn that decision.

 

Gary Mack, spokesman for Rosemont Mayor Donald Stephens, said he did not know whether the powerful mayor who brokered the casino deal would support making the casino’s owners responsible for the horse racing subsidy rather than the state.

 

Rosemont casino supporters have long said that every year the project is delayed, the state loses more than $100 million in revenue. Stephens has complained that “taxpayers and schoolchildren [are] paying the price” for the state’s failure to approve the project.

 

The $100 million figure, Mack said, was derived by looking at the performance of the state’s top-grossing casino, the Grand Victoria in Elgin, which contributed $106.8 million to state coffers last year.

 

That calculation, however, does not appear to take into account the racing subsidy that would reduce state’s revenue from Rosemont.

 

The Rosemont wrinkle aside, the 1999 law has reaped some economic benefit for the state while turning even greater financial rewards for the existing nine casinos and providing a big financial boost for the racing industry, a Tribune analysis of the gambling law’s economic impact shows

 

Thanks to the law, the horse racing industry has received more than $41 million annually in tax reductions or direct subsidies, not including the projected additional $60 million that would come from a 10th casino.

 

Revenue grew because the law eliminated a requirement that Illinois riverboats cruise while gambling is under way, dramatically increasing the number of hours in a day that casinos could take bets. After subtracting new tax breaks and subsidies for horse racing, the state’s new revenue due to so-called dockside gambling amounts to $179 million a year.

 

The bottom line: The 1999 law was worth $410 million per year to horse racing and casino interests. It brought less than half of that to taxpayers.

 

While other industries lay off employees and slash expenses, Illinois casinos are celebrating unprecedented boom times.

 

In Aurora, the Hollywood Casino plans to pay for a $75 million project, with nearly half paid for from cash on hand. In Joliet, Harrah’s is nearly done with an $82 million project–one of four casino expansions around the state totaling $200 million.

 

Critics say state lawmakers spend too much time promoting gambling as a revenue source when its actual impact on the state budget is negligible. Casinos still contribute less than 1 percent of the state’s $51 billion budget.

 

“Out of the $50 billion budget, we spend an awful lot of time talking about not a lot of money,” said Rev. Tom Grey, executive director of the National Coalition Against Legalized Gambling.

 

 

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