Governor: Casinos trying to decrease profits

John O'connor

Thursday, Aug. 14, 2003 | 9:14 a.m.

SPRINGFIELD, Ill. -- Gov. Rod Blagojevich on Wednesday accused some riverboat casino owners of a "cynical" attempt to avoid paying higher state taxes by reducing profits.

The governor again suggested the state should take away casino licenses from private owners and run the boats itself.

Blagojevich criticized boats that are planning to cut their operating time by four hours a day and that have laid employees off. He said they were trying to pressure the Legislature to roll back newly increased state taxes and admission fees.

"It appears to be a cynical, concerted effort on behalf of some casino owners who are more interested in their bottom line," Blagojevich said Wednesday. "Maybe we need to cut those licenses back and let the people own them so we can get more bang for our buck."

The Illinois Gaming Board on Tuesday allowed owners of boats in Alton, Aurora, and two in Joliet to close their doors for six hours a day instead of two, operating from 10 a.m. to 4 a.m.

Casino owners said they need to cut costs after Blagojevich got approval to take 70 percent of revenue over $250 million from the most profitable boats, smaller increases for less profitable boats, and increase admission fees from $3 to as much as $5. The governor hopes to get $200 million a year to help solve a $5 billion deficit.

Tom Swoik of the Illinois Casino Gaming Association said no other business is taxed so heavily -- especially one he said that has provided a steadier source of revenue during its history than other state taxes.

"Now we're looked at as the cash cow and we can't keep up with those kinds of levels," Swoik said.

Calling Blagojevich's comments "outrageous," Jim Wise of Argosy Gaming Co., which owns the Alton Belle and the Empress Casino in Joliet, said the company is merely trying to retain profitability by cutting costs.

Swoik said cost-cutting was necessary to free up money for advertising to keep customers in Illinois from fleeing to neighboring states that operate round-the-clock casinos.

At least four boats have laid off more than 200 workers in the last month because of the new charges, including 70 workers who lost their jobs Tuesday at East Peoria's Par-A-Dice. The boat also changed hours, operating from 10 a.m. to 6 a.m. starting Friday, although it didn't reduce them.

"This was a last resort. All of these changes are directly related to the tax increase," said Rob Stillwell of Boyd Gaming Corp. of Las Vegas, which owns the casino on the Illinois River.

Layoffs include people who run gambling tables, which some boats are replacing with slot machines. That irks Blagojevich, who suggested the boats are using their licenses under "false pretenses" because riverboat gambling was supposed to create jobs.

Anita Bedell of the antigambling Illinois Church Action on Alcohol Problems agreed. "When they came into Illinois they used the mantra jobs, jobs, jobs," she said. "Now they want to eliminate jobs so they can protect their profit."

Bedell said it would be a mistake for the state to take over the boats, as Blagojevich suggested, because it would then be responsible for increasing profits -- and thereby maximizing the number of losers.