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New Casino Bill Hurts Chance For Illinois VLT Market

Posted On: 6/1/2011

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SB 744, Illinois casino bill, Illinois gambling bill, Illinois casino legislation, Pat Quinn, slot machines, amusement business, amusement machine, amusement machine operator, Illinois Video Gaming Act, video lottery terminal, VLT, video poker machine, Illinois Coin Machine Operators Association, ICMOA

SPRINGFIELD, IL -- The Illinois House on May 30 voted 65- 50 for a bill that would allow five new casinos in Illinois state, including one in downtown Chicago. The Senate voted 30-27 for the bill on May 31.

The bill, named SB 744, now goes to Gov. Pat Quinn. At presstime it was unknown whether he would sign or veto the measure.

The governor has supported a casino in Chicago but has been less enthusiastic about gambling facilities elsewhere in Illinois. He has made conflicting comments about the casino and slots legislation, at one point saying he would "never" support it but later saying he was "open" to the idea.

If passed, the legislation would also permit slot machines at O'Hare Airport near the Windy City, and at horse racetracks.

The impending casinos and slot machine installations are expected to generate $1.5 billion in licensing fees this year alone, plus a minimum of $500 million a year in new tax revenues.

The potential impact on the amusement industry is less favorable. Statewide casino expansion could become a major obstacle to the eventual creation of a legal market for operator-run video lottery terminals.

To begin with, casinos such as Harrah's, which already operates two casinos in Illinois, could possibly argue that VLTs should not be allowed because they would create unhealthy competition for state gambling dollars. Many state lawmakers might find such arguments persuasive.

Adding more casinos in Illinois could also impact the eventual fate of the 2009 Video Gaming Act, which authorized operator-run VLTs in the first place. The state Supreme Court heard arguments on May 17 that could result in nullification of the VGA. | SEE STORY

If the high court rules that the VGA was passed improperly as part of a legislative package of unrelated legislation, the bill might have to be re-passed as a standalone measure.

Yet if lawmakers stand to realize billions annually in casino tax revenues, they would have less incentive to authorize a VLT industry. VLTs were expected to generate $375 to $500 million in annual taxes.

The Illinois amusement industry, including amusement equipment manufacturers distributors and the Illinois Coin Machine Operators Association, has strongly supported pro-VLT legislation for many years. The ICMOA is holding its annual meeting June 2-3 at Indian Lakes Resort in Bloomingdale.