Gov. Pat Quinn waited until the last minute to announce his decision on legislation authorizing a major expansion of gaming in Illinois, and as many expected on Tuesday, it was a veto. He is not opposed to gambling itself, but rather to what he considered to be faulty legislation that failed to provide sufficient regulatory oversight and ethical standards.
As Quinn has stated all along, the state has one chance to get it right. And with an industry that has been struggling in recent years, and which is about to face competition from “convenience gaming” in the form of video gaming machines throughout the state, simply adding a number of new casinos may or may not be the right move.
Certainly existing properties are concerned, especially given the results following the opening of the Rivers Casino in Des Plaines a year ago. While Des Plaines was an immediate success, grabbing a 25 percent share of statewide casino revenues and growing the overall total by 20 percent during its first year of operation, surrounding casinos suffered. In the 12-month period ending July, 2012, total adjusted gross revenues at the nine other casinos fell by 8.2 percent. Properties nearest Des Plaines, not surprisingly, took the worst hit, with significant double-digit declines.
Before the Des Plaines casino opened, Illinois’ casino industry was on a downward spiral. Revenues were almost $2 billion in 2007, but fell by more than 30 percent over the next three years. In 2010, revenues were down to $1.4 billion, but inched up to nearly $1.5 billion in calendar 2011 with the new casino providing a six-month boost.
Illinois legislators will consider a veto override after the election, but many are not confident they have enough votes. Assuming there is no veto, you can be sure there will be another attempt to expand gaming next year. Meanwhile, video gaming will soon begin in many areas and the established casinos will continue to fight for survival.