Monday, July 2, 2012
Bad Bet For State So Far On Video Gambling
Thirty percent of the revenue from video gambling machines in bars, truckstops and fraternal organizations was supposed to be the major revenue-producer for 2009's highly-touted State Capital Spending Plan. By now most of the $31 billion in the six-year plan's been spent or committed but, as the Illinois enters its fourth fiscal year after passage, it hasn't received a cent from video gaming yet. Moreover, when it does, it's likely to get a lot less money than legislators expected.
Illinois' Commission on Government Forecasting and Accountability originally estimated 45,000 to 65,000 legalized video poker and video slot machines would generate anywhere from $287 to $533 million per year. However, according to the latest count, more than 180 Illinois Communities have either "opted out" of legalizing video gaming machines or refused to repeal existing laws that ban them. Chicago is by far the largest member of the latter group. In March CGFA cut expected State revenue from gaming terminals almost in half to between $184 million and $341 million.
That may still prove to be an overgenerous guess, though, since even where video gaming's been OK'ed there haven't been many applicants yet. For instance, in both Huntley and Lake in the Hills where there weren't many venues eligible to start with, officials reported last week they knew of only one State license applicant from each village.
Indeed, according to a brief summary 10 days ago by Administrator Mark Ostrowski at the Gaming Board's quarterly meeting, so far, there've only been about 1,000 applications to operate video gaming terminals anywhere in Illinois. Worse, half, he said, had to be thrown out because they weren't filled out properly. And half of what was left had to go into the circular file, Ostrowski reported, because they came from places where the terminals would still be illegal. Bottom line, in mid-June, Ostowski said, the Gaming Board had only approved about 250 video gaming operators in the whole state. Coincidentally, that's the same number involved in the impending August "pilot" test of the terminal reporting system put together by Board contractor Scientific Games Corp.
The Aug. 1 startup date would be several months earlier than experts predicted at the start of the year, a remarkable occurrence in the tech field. IGB spokesman Gene O'Shea told FEN last week it was still a good date as far as he was aware. "I haven't heard anything to the contrary," he said, suggesting inquiries should be directed to Scientific Games. A spokesman at the company in New York said she didn't know when the rollout would come in Illinois, adding that even if she did, she wouldn't be allowed to talk about it. "Why don't you call the Gaming Board?" she asked.