Illinois governor eyeing casino license

Christopher Wills

Thursday, May 29, 2003 | 9:41 a.m.

SPRINGFIELD, Ill. -- State government should be able to buy an unused gambling license and run its own casino, if only to drive up bids from private companies interested in the license, Gov. Rod Blagojevich said Wednesday.

Blagojevich also said he is sympathetic to the idea of canceling a casino license now trapped in legal battles and replacing it with a new license, keeping the state's total at 10.

"What we're interested in is trying to get the most bang for our buck when it comes to money for schools and for health care and for public safety," Blagojevich said. "So the question is, the state owning that 10th license -- does that get us there? Does a bidding process where the state can participate in the bidding with private entities get us there?"

The Democratic governor also acknowledged the revenue measures he wants probably will not produce enough money to cover the spending that lawmakers already have approved. That would force him to ask for more money or, more likely, use his veto powers to cut spending lawmakers have added to his budget proposal.

"My preference is, unless it's education, less is better," Blagojevich said.

The governor has rejected gambling expansion as a way to help fill the state's roughly $5 billion budget deficit. But his plans do include $201 million from raising casino taxes and $350 million from auctioning off the unused 10th license, now owned by Emerald Casino Inc.

Casino companies, however, argue that the tax increase -- as high as 70 percent -- will hurt their business and drastically reduce the value of the 10th license.

Some lawmakers were skeptical. The chairman of the Senate's gambling committee said it could hurt the other riverboats and the state wouldn't get money from selling the license next year -- money that is essential to Blagojevich's budget plan.

"That would be a tremendous crimp, even though in the long run it may be better," Sen. Denny Jacobs, D-East Moline, said.

Blagojevich said one way to guard against companies submitting low bids for the license is to let the state bid, too.

"Let those investors come in and have to know they have to bid against the state and so they better make their bid good," he said.

If the private companies don't offer enough, the state could get the license and hire a firm to manage the casino, Blagojevich said, noting one Canadian city has such an arrangement.

He said it was unlikely that a state-owned casino would be opened in Chicago.

The governor earlier proposed the state take over all Illinois' casinos, but the idea received no support.

The license owned by Emerald is wrapped up in lawsuits and bankruptcy proceedings that threaten to delay any sale. Attorney General Lisa Madigan has suggested circumventing the situation by creating and selling a new license.

Blagojevich said he likes that idea if the Emerald license cannot be sold soon.

Lawmakers last week approved most of the state budget for next year. They largely followed the governor's proposal, which called for increasing general spending by more than $700 million, but added about $135 million for schools, prisons and social services.

Blagojevich has suggested raising school spending by an additional $100 million if lawmakers approve all the revenue measures he wants -- such as raising business fees, ending some tax exemptions and dipping into special government funds.

But he says the spending is "likely" to outstrip the money from his revenue plan, making cuts a possibility.

Meanwhile, attorneys for Emerald Casino said they will ask a bankruptcy judge to delay Monday's Illinois Gaming Board hearing on whether to revoke its license. Attorney Walter Lancaster says Emerald needs more time to work out a deal with the state to sell the license.