05/02/2013 9:05AM

Illinois Senate passes bill allowing slots at tracks


The Illinois Senate by a 32-20 vote late Wednesday passed Senate Bill 1739, which would expand gaming in the state and allow racetracks to operate slot-machine parlors.

The bill now moves to the House of Representatives and, should it pass there, must be signed by Gov. Pat Quinn to become law. Quinn in January vetoed an old gaming-expansion bill that had been held for nearly two years at the desk of Senate president John Cullerton, and during 2012, Quinn loudly voiced skepticism about what he termed top-heavy gaming expansion.

But this legislative session’s gaming-expansion legislation, opposed as it is by entrenched gaming interest in the state, stands a better chance at passage. Quinn’s position on expanded gaming has softened considerably since last summer, the current version of the bill was crafted to address concerns he had about regulatory oversight, and an internet-gaming provision of the legislation that could have bogged the bill down was dropped this week. Moreover, with Illinois facing a budget crisis, the expansion of gaming proposed in SB1739 is forecast to net the state about $1.2 billion in up-front licensing fees.

There are 10 casinos operating in Illinois and the bill would allow five new ones, including a casino in downtown Chicago long coveted by Mayor Rahm Emanuel. The four other new casinos would be located in southern Cook County, Danville, Lake County, and Rockford. Slots would be permitted at Midway and O’Hare airports.

The legislation would permit the state’s five racetracks (three Thoroughbred, two Standardbred) to operate temporary gaming parlors while constructing permanent racinos, and would change the racing landscape in the Midwest. Purses in the states to the east and west of Illinois, Indiana and Iowa have for years been subsidized by slot-machine revenue, and even a modest purse boost from slots would give Arlington Park and Hawthorne Racecourse, the Chicago-area tracks, a new competitive advantage over Indiana Downs near Indianapolis and Prairie Meadows near Des Moines.

Passage of the legislation also would throw a lifeline to struggling Hawthorne, which saw handle on its spring meet drop 22 percent this year. The western portion of Hawthorne’s grandstand has sat empty for years, and presumably could be converted to a slots parlor in fairly short order.

The internet gaming portion of the bill that was dropped from the version that passed the Senate could come up as a stand-alone bill in the ongoing legislative session. As written in SB1739, racetracks would not have to devote to purses any profits earned from online casinos, a condition strongly opposed by horsemen’s groups in the state.

SB1739 would relicense account-wagering companies in Illinois, where residents haven’t been able to bet online since January because of legislative inaction. The absence of account-wagering handle has jeopardized the operations of the Illinois Racing Board, which derives more than one-fourth of its funding from account-wagering bets. Marc Laino, the executive director of the IRB, said Wednesday that the IRB would begin operating at a deficit later this summer without the restoration of full funding.

The bill also would do away with the controversial law known as recapture, through which racetracks annually deduct money from purse accounts to compensate for handle on their live product lost through the introduction of full-card simulcasting in 1994.