CHICAGO - Riverboat gambling may fatten government coffers with gaming tax revenues, but it may not attract economic development, according to panelists at a conference last week.
William Hall, executive director of the Illinois Economic and Fiscal Commission, the fiscal analysis arm of the state legislature, said while existing riverboat gambling in Illinois has had a positive monetary effect for local governments that host the boats, "broad" economic development as a result of gambling has not emerged.
"We don't see any impact on economic development," said Hall, who spoke at the Bond Buyer's Midwest Public Finance Conference Friday in Chicago. "We're talking about jobs, and for us in Illinois, we're not able to attribute increased employment directly to riverboats."
Craig R. Johnson, president of Gaming Development International, told attendees that riverboats, a fast-growing gaming field, have brought governments millions of dollars in gaming tax revenues and spurred the creation of thousands of new jobs.
Johnson said the most successful riverboat operations do not set bet or loss limits on gambling, like the ones in Iowa.
"The impact has been incredible except for Iowa," he said, noting that there are no signs of gaming saturation even though legalized gambling takes place in 48 out of the 50 states.
For example, Johnson pointed to Illinois, which has licensed several riverboats along the Mississippi and other rivers. He said the state and local governments should receive a total of nearly $230 million this year, along with the creation of 9,000 to 12,000 new jobs.
Of particular interest to the panelists was Chicago's latest attempt to win state legislative approval for a riverboat casino and entertainment center that would be financed with up to $800 million of revenue bonds.
City officials have said the project would generate 15,000 jobs and about $300 million a year in revenues.
Legislation introduced last month in the Illinois General Assembly has stalled after Senate President James Philip, R-Wood Dale, placed a number of business-related reforms on the table for negotiation.
John Stroger Jr., a Cook County, Ill., commissioner and Democratic nominee for county board president, said that while he supports Mayor Richard Daley's riverboat gambling project, he is worried about the potential costs to the county.
So far, no provision has been made to allocate any revenues from the project to the county. The project would be subject to admissions, local franchise and other fees, and the state's 20% tax on gross receipts from gaming. Chicago estimates that total direct and indirect tax revenues from the project will be about $200 million a year for Illinois, $50 million for Chicago, and $50 million to $65 million for the Chicago public schools, the recipient of admissions fee revenues.
Dewey Pearman, vice president of governmental and legislative affairs for the Northwest Indiana Forum, an economic development group that successfully pushed for floating casinos in the northwest corner of the state last year, told local officials to get a spot at the negotiating table early if they want to share in gaming revenues.
"If you're not at the table when the deal is cut, then you're cut out of the deal," Pearman said.