Madigan proposes more casinos, new eyes
SPRINGFIELD -- Riverboat gambling already is big business in Illinois, but soon could get much bigger -- a major expansion could put the state in the company of Nevada and New Jersey as the nation's major gambling destinations.
Before that happens, though, House Speaker Michael Madigan says the obscure board that regulates the casino industry needs an overhaul.
Madigan wants to revamp the Illinois Gaming Board with five new members vetted by a blue-ribbon panel, separate the board from the state agency that currently oversees it and hire a gaming enforcement director and inspector general to root out state gaming and ethics law violations.
"There's nothing wrong with the current gaming board. They've done a good job," Madigan said at a recent news conference in Chicago announcing his proposal. "We have to change the Illinois gaming regulation. We have to bring it up to speed."
But the proposal is getting a lukewarm reception from some key players.
"We're already probably one of the most regulated industries in the state," said Tom Swoik of the Illinois Casino Gaming Association, which hasn't taken an official position on the proposal. "The gaming board has been doing their job."
The state currently has nine operating riverboat casinos, with a 10th authorized but stuck in legal limbo. Various expansion scenarios range from one huge land-based casino in Chicago, the city's first, to up to four new casinos, including three outside the city.
Lawmakers see more casinos and more slot machines at the existing boats as the best way to pay for billions of dollars worth of new road, school and government construction projects.
But Madigan says any expansion must include better regulation of one of state government's most important industries.
The gaming board, which includes five members and more than 130 agency employees, now operates largely behind the scenes.
Its administrative operations are overseen by the state Department of Revenue, with board members appointed by the governor and confirmed by the Senate. The board closely watches riverboat operations, licensing operators and conducts detailed background checks to ensure license holders and companies that provide gaming equipment meet the right qualifications.
Madigan wants a new board with members required to have more detailed experience, such as extensive legal, law enforcement or accounting backgrounds. Board members would be paid the same as judges, more than $150,000 a year, rather than the small stipend they get now for each day they do board work.
A nine-member group picked by the Illinois Supreme Court would come up with a pool of recommended appointees, and the governor could only pick board members from that pool.
Board and staff members also would be subject to a so-called "revolving door" provision, designed to block cronyism, that prevents them from working for casinos shortly before or after their board service.
And casinos would pay $250,000 a year for their license renewal fee, up from current fees of $25,000 at startup and $5,000 for renewals. That would help pay for increased gaming board responsibilities and more staff, and the board no longer would be funded through the Revenue department.
Policymakers and industry officials have mixed reaction to the plan.
Advocacy groups such as the Illinois Campaign for Political Reform and Chicago Crime Commission strongly support the idea. They say it's critical to remove even the perception of impropriety and insider wheeling and dealing in such an important industry, especially as it grows and gets more profitable.
"It puts Illinois into a strict regulatory environment and sets it up the way it should have been set up," said Jeannette Tamayo of the crime commission and a former gaming board top staffer.
She and Rep. Lou Lang, a Skokie Democrat, both have complained in recent years about Revenue's influence over the board's hiring and other administrative decisions. The setup creates the potential for problems, Lang said.
"There's been undue influence coming out of the governor's office impacting the gaming board," Lang said.
Swoik, a former gaming board employee, agrees that more money is needed for staffing but said that could be handled without taking away Revenue's oversight.
"Any time you're under another state agency, there are certain bureaucratic hoops you have to jump through," Swoik said. "I never saw interference."
The board and Chairman Aaron Jaffe declined to comment.
"We take our marching orders from the legislature," board spokesman Gene O'Shea said.
A spokeswoman for Gov. Rod Blagojevich said the administration wants to ensure the board is independent and that no elected officials benefit from ties to the industry. But she would not say whether the governor supports Madigan's ideas.
Senate President Emil Jones, a Chicago Democrat, was out of town this week and unavailable for comment.
Both Republican leaders indicated support for revamping the board, with specific details to be worked out.
A spokeswoman for Senate Minority Leader Frank Watson, a Greenville Republican, said his caucus has pushed for restrictions such as a code of conduct for board members and a stronger ban on their financial interests.
House Minority Leader Tom Cross said he agrees with Madigan that caution is the best approach.
"I think you have to be incredibly sensitive to the nature of this industry and I think you need to go almost overboard in making sure that there's no impropriety," said Cross, an Oswego Republican. "I'm 110 percent on board."
Madigan's proposal
House Speaker Michael Madigan says any gambling expansion proposal approved by state lawmakers must include a revamped Illinois Gaming Board to better regulate the industry. Here is a look at what Madigan has proposed:
• Appointment of a new five-member gaming board; current members could apply for reappointment if they met the new board's more stringent eligibility requirements.
• Require board members to have extensive background in specific subject areas such as law enforcement, accounting and the judiciary. Members could not be elected officials or have any position with a political party while serving.
• Pay members an annual salary of more than $150,000, the same as circuit and appellate judges.
• Board members would be selected by a blue-ribbon nominating panel picked by the Illinois Supreme Court that includes former judges, law enforcement officials, nonprofit advocates and former federal regulators. The governor could only appoint board members from the pool of candidates picked by the nominating panel, and the state Senate would confirm those appointments.
• Appoint a director of gaming enforcement with at least 10 years of experience in law enforcement investigations to monitor casino operations and investigate state gaming law violations.
• Appoint an inspector general to investigate state ethics law violations by the gaming board and its staff.
• Bar board members and staff from working in the casino industry for at least two years before and five years after their service with the board. The governor and senators would be barred from communicating with board members about board business except in open meetings.
• Riverboat casinos would pay an initial and renewal license fee of $250,000 every year, rather than the $25,000 initial and $5,000 renewal fees they pay now. The extra money would go to separating the board from the Department of Revenue and providing more funding for extra staff.
Source: Madigan's office.