Illinois casino officials say they severely underestimated the impact video gambling would have on their bottom line and are asking state regulators to intervene as they continue to lose business to machines at neighborhood bars and truck stops.
Tom Swoik, executive director of the Illinois Casino Gaming Association, contends the devices have become so prolific that casinos are struggling to compete. Regulators acknowledged some concerns with the state’s 2009 video gambling law, but chided the casino industry for not trying to block it in the first place.
In 2013, the state’s 10 casinos reported $1.55 billion in revenue, a 5.3 percent drop from the $1.64 billion that came in the year before, according to the Illinois Gaming Board. Video gambling machines started to go online in fall 2012. In 2013, more than $300 million was collected at 13,374 video gaming terminals across the state.
“The Illinois gaming world has changed dramatically over the past year and a half. Every month, we’re seeing about 850 new slot machines come into existence,” Swoik said. “That’s nearly a new casino every month.”
The latest drop in casino revenue continues what’s mostly been a trend in Illinois and nationwide during the struggling economy.
Swoik argues that the video gambling law was drafted so broadly that it has allowed businesses that were not intended to have slot machines to install the devices. While proponents said the legislation would limit video machines to bars, restaurants, truck stops and fraternal organizations, Swoik pointed to instances where a flower shop in Oak Lawn and a scuba shop near Rockford have secured licenses to pour liquor, which allowed them to apply for up to five gambling machines.
Swoik said those who operate video machines also have an unfair advantage because they don’t have to abide by the same rules as casinos when it comes to problem gamblers. For example, there’s no way for places with video poker machines to screen for gamblers who have put themselves on a self-exclusion list designed to prevent them from gambling.
Video gambling operators also are allowed to send out mass mailings about discounted or free gambling without regard to whether it ends up in the mailbox of a problem gambler, whereas casinos are responsible for removing those on the self-exclusion list from all mailing lists and marketing databases.
Swoik asked gambling regulators to help draft rules to address those issues, saying an effort to tighten the video gambling law fizzled during the final days of the spring legislative session. He also reiterated his group’s opposition to legislation that would add a casino in Chicago and four other locations and allow slots at race tracks, saying the market is saturated.
Gaming Board Chairman Aaron Jaffe acknowledged issues surrounding problem gamblers must be addressed, but scolded Swoik for not stepping in when lawmakers legalized video gambling five years ago.
“I have to say that your organization did not take the lead in stopping anything in video gaming, as a matter of fact your position was ‘Well, it won’t hurt us,” Jaffe said. “That was contrary to the belief of a lot of people. Now you come to us and say, ‘We’re hurting.’ Well, we knew that in advance. And you knew that in advance, but you refused to acknowledge that.”
Swoik agreed that mistakes were made.
“There is no doubt the casino industry simply underestimated the impact these machines would have on our industry,” Swoik said.