By Olivia Grady

On January 11, 2017, Illinois Assistant Majority Leader Senator Terry Link introduced a bill, the Chicago Casino Development Authority Act, which creates a government authority to promote and maintain a new government-owned casino in Chicago. In addition, it establishes the Division of Internet Gaming and authorizes electronic gaming at racetracks.

The idea of a government-owned casino in Chicago has been around for a while. Proposals have been made for a number of years, including last year, but the proposals have never been implemented.

In 2015, however, Governor Bruce Rauner (R) voiced support for the project, unlike his predecessor Pat Quinn (D) who vetoed it, giving certain politicians reason to hope.

Chicago Mayor Rahm Emanuel, for example, is particularly fond of this idea. He believes he can help his union friends while closing budget deficits in the billions for Chicago, mostly caused by government employee pensions.

As one unnamed Chicago political activist said to Bill McMorris for McMorris’ Washington Free Beacon article, “Chicago Casino Could Boost Pensions and Union:” “The mayor’s zeal for this casino grew after he received the UNITE HERE endorsement.”

Matt Patterson, Executive Director of the Center for Worker Freedom agreed that the union would benefit the most from this idea:

“We understand Chicago officials want to create jobs, and a new casino may be one way to do that. However, if these new jobs add to the unionized public-sector workforce, the whole scheme may amount to nothing more than a huge gift to the mayor’s friends at UNITE HERE, and enlarge the already-unsustainable public pension obligations that are bankrupting the city and state,” Patterson said.

After Emanuel took office in 2011, UNITE HERE had a 17 percent increase in dues paying members in just three years. If all of the casino positions were unionized, the union might get a 30 percent increase in members.

However, as Matt Patterson pointed out in his Forbes column, “Rahm Emanuel Rolls The Dice On A Government-Owned Casino In Chicago,” this plan for decreasing the deficits isn’t going to work. Casinos are already bringing in millions for the state. In 2014, the state collected $501 million alone from the casinos. Adding another casino will not bring in the same amount of money as the other casinos because the market is saturated and casino revenues are decreasing.

Government bureaucrats also are inaccurately basing their projections off of privately owned casinos, not publicly owned ones. This is because there aren’t any publicly owned casinos. Unfortunately for Emanuel, privately owned businesses earn higher earnings than public-private partnerships at lower costs, i.e. UPS vs. USPS.

Finally, a casino is expensive to build and run, and it moves or destroys other businesses. The expense, plus the potential loss of tax revenue from the businesses that are destroyed, might be greater than the revenue from the casino.

In this current bill, the co-sponsors are Dave Syverson (R), Mattie Hunter (D) and Donne Trotter. In addition to promoting and maintaining the casino, the Authority:

“shall own, acquire, construct, lease, equip, and maintain grounds, buildings, and facilities for that purpose. However, the Authority shall contract with a casino operator licensee to manage and operate the casino and in no event shall the Authority or City manage or operate the casino.”

The bill also introduces a Chicago Casino Development Board with 5 members appointed by the Mayor to perform the administrative functions, i.e. develop a budget and prepare an annual report. There is also an Advisory Committee of 9 members selected by the Governor and Mayor to:

“monitor, review, and report on (1) the Authority's utilization of minority-owned business enterprises and female-owned business enterprises, (2) employment of females, and (3) employment of minorities with regard to the development and construction of the casino as authorized under Section 7 of the Illinois Gambling Act.”

The Committee will be dissolved when the casino opens.

Another problem with this bill is that the City may use eminent domain to take people’s property without their permission in exchange for usually less than the actual value to build the casino.

Finally, labor even plays a role in this bill. The Authority is allowed to enter into agreements with labor unions to provide training to increase the number of women and minorities working in building trades. The casino also can only operate if there is a labor peace agreement with the unions attempting to unionize casino workers.

On January 25, 2017, the Senate Gaming Committee held a hearing to hear testimony about the impact of the bill. Scott Eisenhauer, Mayor of Danville, a town 90 miles west of Indianapolis, spoke about economic benefits that unfortunately wouldn’t materialize from this bill:

“We have our unemployment rate as well as our poverty levels which exceed the state average,” Eisenhauer explained in his reasoning for wanting gambling. “I stand before you today seeking your support on this economic development bill. Let’s make no mistake, that’s exactly what this is.”

The Third Reading just passed on February 28, 2017.

The Center for Worker Freedom has been involved in this issue for several years because it is important to explain why this idea is terrible for taxpayers and workers alike. We created a website, Don’t Gamble Our Future, and a video, A Government-Owned Casino in Chicago? 60 Seconds, where readers can learn more.

And the Center for Worker Freedom will continue to monitor this idea and let Illinois residents know that this is pay-for-play.