Future of Illinois’ revenue from gambling in question, commission says

John O'Connor

Thursday, Sept. 21, 2000 | 5:19 a.m.

SPRINGFIELD, Ill. - Lottery and horse racing revenue has stagnated in Illinois and the take from riverboat casinos eventually will, too, according to a new report from the Legislature's fiscal forecasting arm.

Tax receipts from gaming increased 5 percent, to $861 million last fiscal year, but only because the state's return from riverboats jumped nearly 38 percent to $330 million, according to numbers released Thursday by the Illinois Economic and Fiscal Commission.

"Even revenues from this fast-growing form of gaming will eventually begin to plateau," the commission's report said.

Before a 1999 law allowing dockside gambling helped boost riverboat receipts to $1.6 billion in 2000, the commission pointed out that gross receipts on riverboats stagnated at no more than $1.2 billion annually from 1995 to 1999.

State revenue from the lottery dropped 4.9 percent in the fiscal year that ended June 30 and horse racing contributions dropped 6.2 percent. A sour economy would cut revenue further, the commission said, and the Legislature might want to tweak gaming rules to increase it.

Senate Appropriations Chairman Steve Rauschenberger, R-Elgin, said gaming revenue is not large enough in a nearly $50 billion budget to cause immediate concern. Minus gaming contributions, general state revenue increased nearly 8 percent in each of the last two years, according to the governor's Bureau of the Budget. But that could change, he said.

"When we see our next downturn, there will be increasing pressures on the existing revenue streams and a tendency to want to revisit the things that make gaming grow," Rauschenberger said.

Riverboat revenue makes up 38 percent of the state gaming total, a figure that has been growing. The report predicts that trend will continue in the near future, especially if a proposed tenth riverboat begins operation in Cook County. The Legislature approved moving it from Jo Daviess County in 1999 but a legal battle has held up its opening.

Lottery ticket sales hit $1.5 billion for the 12th year in a row, according to the report, but still declined for the fourth consecutive year, from a peak of $1.64 billion in 1996. Those sales generated $515 million in tax revenue in fiscal 2000, a drop of $25 million.

Revenues from horse racing dropped to an estimated $16 million because of state tax changes last year. The reopening of Arlington International Racecourse will increase the amount wagered, the report notes, but likely not significantly.

Rep. Jeff Schoenberg, D-Evanston, a House Appropriations Committee chairman, said the report underscores the need to reduce reliance on gambling as a state revenue source.

"We should not lean heavily on gaming revenues to educate our children or provide health care," said Schoenberg, who renewed a call for competitively bidding riverboat licenses to get their true market value for the state.