Daily Herald
Madigan pitches gambling plan to fix cash woes
By John Patterson and Marni Pyke | Daily Herald Staff
Published: 12/11/2007 12:18 AM

With a mass transit doomsday just weeks away, one of the state's top Democrats lent his support to a massive gambling expansion Monday in hopes of keeping the buses and trains running.

The proposal backed by House Speaker Michael Madigan, a Chicago Democrat, would put a casino in Chicago, auction off two other licenses, expand existing riverboats and put thousands of slot machines and video poker at horse tracks, including Arlington Park, despite local opposition.

The state's billion-dollar annual tax take from such an expansion would finance a construction spending spree nearly a decade in the making.

Madigan said gambling has become the last resort for funding construction and education and bailing out the Chicago region's bus and train agencies before a financial "doomsday" early next year.

"In light of this reality, and particularly out of a strong desire to see the unseemly drama over mass transit in northeastern Illinois that has played out over the last six months brought to a conclusion, I am willing to embrace compromise and offer a sincere, serious proposal that will receive my full support and backing," Madigan said in a letter to members of the General Assembly.

Illinois House members are being summoned back to the Capitol for a possible vote on Dec. 17 and told to prepare for more than one overnight stay. A Senate spokeswoman said Senate sessions are "possible."

Temporary financial fixes for the Chicago area's bus and train agencies run out in mid-January. So far, many suburban and downstate lawmakers have rejected bailing out the agencies, using their votes to signify their frustration that leaders have been unable to agree on construction spending, which is of far greater importance downstate and in some outlying suburban areas.

Madigan sought to portray the plan unveiled Monday as the product of talks with the state's other political leaders. But one Republican familiar with ongoing talks cautioned that this should not yet be described as a "deal." Other leading Democrats were reluctant to embrace the plan and said they had not seen details.

"You can put one thing on paper, but it's what the words actually say," said Senate President Emil Jones Jr., a Chicago Democrat and ardent gambling proponent who's often differed with Madigan.

A spokeswoman for Gov. Rod Blagojevich said only that this plan had not been reviewed.

House Republican leader Tom Cross of Oswego, however, said the differences appear to be narrowing.

"The great thing about negotiations is you get closer and closer each time," Cross said.

But this plan is likely to generate controversy on several fronts. There's already been heated criticism of a provision intended to dramatically alter how women and minorities gain access to an ownership share of the new casinos.

Madigan contends the plan should be open to any minority or woman who can come up with a $5,000 share, with a lottery to pick the actual investors. But others prefer the previous system, which involved women and minorities with significant financial backing being part of the ownership applications for the casino license.

Also at issue is how much Chicago should pay for a gambling license. Early estimates said the license could be worth $800 million, while city officials said any fee would be too much. This plan calls for a $200 million payment to the state.

Additionally, aside from the Chicago casino, there's no specific site named for the other two licenses. Jones has long sought a casino for the South suburbs, and state Sen. Terry Link, a Waukegan Democrat and member of Jones' leadership team, has pushed for a Waukegan site.

Latest gambling plan

House Speaker Michael Madigan lent his political support Monday to a gambling expansion plan to benefit education and finance billions' worth of construction spending. Here's an overview.

Casinos, slots

A Chicago casino and two others, slots at horse tracks, more gambling room at existing casinos.

Quick details

• Chicago casino run by Chicago Casino Development Authority, whose three members will be appointed by the mayor. Will pay $200 million to the state for the casino license.

• The unused 10th casino license once headed to Rosemont and one new license would be auctioned off for use anywhere in Illinois so long as the casinos are on water.

• Existing casinos get access to 3,500 new gambling spots at a cost of $50,000 per machine. For the first time, could use them on land.

• Horse tracks split 3,600 gambling positions for video poker and slot machines with Arlington Park getting at least 1,100 - nearly as many as allowed at Elgin's Grand Victoria. The "racinos" would pay $50,000 per gambling machine spot.

Splitting the pot: The bulk of the money would be split between education and construction funding.

• State's tax take from Chicago casino would send 70 percent to a construction fund, with those dollars divided 40 percent for roads, bridges, transit and local projects, and 60 percent for building schools, parks, cultural institutions and museum projects. Other 30 percent is divvied up by lawmakers and the governor.

• Cities with existing riverboats like Elgin would not get more money from the expanded gambling. Their share of the take would be frozen at current levels. But counties would get 2 percent of the new gambling money to use for courts and cops or health care spending.

• Cities with horse tracks would get 2 percent of the take from the new "racino." If the Arlington Park racino turns a profit akin to the Grand Victoria casino, it could mean upward of $8 million for local spending.

Ethics and Oversight

• Existing Illinois Gaming Board abolished and replaced with expanded panel whose members undergo greater scrutiny, given greater power.

• Arlington Heights local opposition to slots legally trumped by state.

Hurdles

• Not everyone involved thinks a new gaming board is needed.

• Location of casinos not spelled out; other proposals specified South suburbs and Lake County.

• No specifics yet on how the billions leveraged would be spent.

Did you know?

A gambling "position" does not mean a slot machine. Under state gambling regulations, a slot machine is equal to 0.9 gambling position. A craps table is worth 10 positions and other gambling tables are equal to five positions. The current casinos can have up to 1,200 gambling positions.

Sources: Daily Herald interviews, legislative memo