CHICAGO -- Riverboat casinos and other gaming enterprises are not a sure bet for local economic development, according to speakers at a meeting of the Chicago Municipal Analysts Society Friday.

Prof. Robert Goodman, an urban planning expert at Hampshire College, Mass., said that while local casinos are a windfall for state and local governments, they often siphon off money from private sector entertainment businesses, like movie theaters and restaurants.

"If you have gaming, it's going to generate new revenue, but it's going to steal from existing businesses," Goodman said.

William G. Hall, executive director of the Illinois economic and fiscal commission, an agency of the state general assembly, said even though riverboat gambling is often sold as an economic development tool, his studies in Illinois show that it fails to deliver on precisely that point.

Hall has studied sales tax receipts for both general merchandise and food and beverage in the 12 Illinois towns that had launched riverboat casinos by 1993. The commission found virtually no change in economic activity beyond what could be attributed to Illinois' recovery from the recession.

"The spinoff development for local businesses just hasn't developed," he said.

Legislatures in other states, meanwhile, have been rapidly liberalizing gaming laws.

Robert Durante, an associate director at Standard & Poor's Corp., noted that only two states allowed non-lottery forms of gaming in 1990, while today, gaming is allowed in 23 states. And the boats, barges, and racetracks are often funded by bond issues.

One gaming enterprise already feeling the heat of increased competition is Prairie Meadows racetrack in Polk County, Iowa. The track recently received voter approval to install slot machines in order to help it raise the money to make debt service payments on $38.8 million of bonds.

Hall said Polk County may just be the beginning. "I'm worried about Illinois," he added.

He said the state will face increased competition due to startup boats in nearby Gary and Hammond, Ind., the possible revival of slot machines in St. Louis, and a newly liberalized gaming law in Iowa.

"What will be hurt most will be the riverboat towns downstate," Hall said. He suggested that other bond-financed gaming enterprises could encounter the same kind of payment difficulty faced by Prairie Meadows.

Despite those concerns, Illinois may be asked to authorize more gaming licenses this year, when Chicago Mayor Richard M. Daley will probably revive his bid to bring casino gambling to the city. Under a proposal floated by Daley last April, the gaming complex would be financed with $800 million of revenue bonds.

State lawmakers have so far refused to approve the issuance of casino licenses in Chicago, despite Daley's claims that they would spur economic development in the city.

He has wooed lawmakers with the promise that downtown casinos would attract out-of-town conventioneers and tourists who would have to stay at local hotels and spend money at nearby businesses.

But Goodman was skeptical. Serious gamblers, he said, already favor Las Vegas, and Chicago's cold, windy charms -- gaming tables or no -- may not be able to compete.

He noted that Montreal recently built a casino in hopes of capturing the same kinds of 20 tourists Chicago hopes to attract. But an April 1994 visitor profile

of Montreal showed that only 5% of the gamblers there came from outside the area.

"If you're going to beat Las Vegas, you have to have a hotel that looks like a pyramid and has fireworks coming out of the top, and naked girls running around in shows," said Hall.

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