The 10 casinos of Illinois reopened this month, but they’re not paying as much tax to the cash-strapped state as they did before the COVID-19 pandemic, thanks to a change Springfield lawmakers approved quietly.
The casinos were not supposed to see their tax rate cut until a newly approved casino finally opened in Chicago, ramping up competition for the existing facilities outside of the state’s biggest city.
But the change made during this spring’s session of the Illinois General Assembly moved up the date when the lower tax structure at existing casinos would take effect — to July 1. That turned out to be the same day the casinos across the state reopened.
Illinois officials and gambling-industry advocates told WBEZ they do not yet know how much lost revenue that change in the law will mean for the state.
State Rep. Bob Rita, D-Blue Island, is the point man on gambling legislation in the Illinois House and he was a House sponsor of broader legislation that included the speeded-up tax cuts for casinos. State records describe the change as “the acceleration of the reduced tax rate for current casinos.”
Rita said there was bipartisan support for making the change to benefit the casinos, even though the state government was facing a severe financial crisis even before the pandemic, which has only made the situation worse.
“I thought it was a reasonable change with them being shut down,” Rita told WBEZ this week. “There was no opposition, and this could be a little bit of a relief from what they’ve went through.”
Rita said lawmakers did not know when the casinos would reopen when they passed the measure in May. Democratic Gov. JB Pritzker signed it into law on June 30, state records show.
The move was part of the legislation passed during the pandemic-focused spring session, which was intended to make the new Chicago casino more viable.
According to General Assembly documents, the new tax structure for the 10 casinos across the state would begin this month “rather than the first day the [Chicago] casino conducts gambling operations.”
The Illinois Gaming Board, which regulates casinos and other legalized betting in the state, told lawmakers the change would “decrease state revenues.” But at the time of the vote, gaming officials said the lost revenue was an “unknown amount.”
And they still don’t know the impact of the legislation. In a statement this week to WBEZ, the gaming board’s policy director, Joe Miller, said, “The tax change was implemented on July 1, 2020. The IGB has not conducted a subsequent analysis of the proposed tax changes as the IG does not forecast revenue projections.”
The reopening of the casinos means revenue from gambling is flowing again to the state’s depleted coffers. But the industry’s chief Springfield lobbyist said some casino executives fear their take could be down by more than half during the rest of this year because of the pandemic.
“We’ve been closed down so long, we wanted some kind of break in tax structure,” said Tom Swoik, state-government lobbyist for the Illinois Casino Gaming Association.
Savings from the tax cut would go “toward promotion, to get people to come back now that we’ve reopened,” he said.
All the casinos furloughed employees after the governor’s first shutdown order in March, Swoik said.
Rivers Casino in Des Plaines furloughed 1,442 of 1,493 workers and sharply cut the pay of the rest of its staff at one point during the shutdown.
Many casino workers have been called back to work, but others have not returned because some typical casino amenities — including valet parking and buffets — are not yet being offered again, Swoik said.
Springfield was not the only level of government where lawmakers are helping gambling interests get through the pandemic.
Federal records show the Casino Queen in East St. Louis, Ill., got between $2 million and $5 million in coronavirus aid from Washington under the Paycheck Protection Plan, which was approved by Congress and signed by President Donald Trump in March.
Three other Illinois gambling companies — Lucky Lincoln Gaming, Illinois Gaming and Ignite Gaming — each got between $350,000 and $1 million in PPP loans, which were intended to deter layoffs by “small businesses” that are feeling the pandemic’s economic repercussions.
Dan Mihalopoulos is an investigative reporter on WBEZ’s Government & Politics Team. Follow @dmihalopoulos.
via WBEZ Chicago
July 11, 2020 at 09:48AM