Editorial: Keeping video gambling numbers in perspective

  • Video gambling machines are multiplying throughout Illinois. A new report says that in 2017 they produced more revenue for the state than casinos for the first time.

    Video gambling machines are multiplying throughout Illinois. A new report says that in 2017 they produced more revenue for the state than casinos for the first time. Daily Herald File Photo

 
The Daily Herald Editorial Board
Posted10/18/2017 6:35 PM

As proposals to expand gambling in Illinois continue to proliferate -- although it didn't become part of the final deal, gambling expansion was for a time a feature of the grand-bargain proposal that eventually broke the state's two-year budget stalemate -- it is instructive to consider statistics compiled in the state's latest "Wagering in Illinois" report.

State receipts from video gambling have climbed every year since the machines were first allowed five years ago, and, as the Daily Herald's Jake Griffin reported Wednesday, they surpassed statewide casino gambling revenues in Fiscal Year 2017 for the first time -- producing $296 million compared to $270 million from casinos. In addition, they provide tens of thousands to hundreds of thousands of dollars in local revenues to communities that allow video gambling. Financially, these are outcomes we might normally be compelled to cheer. So, why aren't we cheering?

 

Several reasons. For one, it's those pesky numbers. Yes, the state's take from video gambling is impressive, but when you look at historical trends, the picture is not so bright. Indeed, the $566 million total produced by casino and video gambling last year almost exactly equals the $564 million median collected by casino gambling alone during a nine-year swell from 2001-2009, leading into the start of the Great Recession. The $1.3 billion in 2017 total gambling revenues collected -- which includes money from the lottery and horse racing -- actually is less than the total collected in each of 2005, 2006 and 2007.

In short, a practice branded long ago as the "crack cocaine of gambling" appears to have done little more than siphon revenues away from casinos, with a seemingly neglibile impact on state revenues. Meanwhile, gambling machines continue to multiply -- expanding now to nearly any venue with a liquor license, including family restaurants, grocery stores and even the occasional beauty salon. Griffin cited Illinois Gaming Board data showing that just in the three months since the end of FY 2017, video gambling grew in Illinois by nearly 900 terminals and 125 businesses - to 27,681 and 6,249, respectively.

With all this growth has come negative effects that are at best poorly measured and at worst highly troubling. Even before Illinois began to allow video gambling, research had shown that the machines produced addiction faster than other forms of gambling. Now, a study focusing on the city of Chicago adds evidence that property and violent crimes increase near gambling establishments and persist over time.

"Estimates suggest that in the ... years since video gambling was legalized in Illinois, the increase in crime cost Chicago residents approximately $55.5 million, which is orders of magnitude larger than the estimated transfers of state gambling tax revenue to the city," states the joint report by the University of Illinois Department of Economics and the Universidad de los Andes School of Government released in August. If such figures are evident for a place whose only connection is proximity to suburbs that allow video gambling, what does that suggest for our own communities?

We have long opposed attempts to allow or expand video gambling in Illinois or in suburban towns. But the machines have come despite our opposition and that of citizens and agencies who share our concerns. As the practice sinks its roots deeper into our culture, some may look at its numbers in a vacuum and see at least the consolation of financial rewards. Yet, in a broader analysis, we find ourselves as troubled as ever and wondering still, "Is this what we want our communities and our state to look like?"

Illinois policy makers would do well to ponder such questions as gambling proposals continue to surface.

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