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Wednesday, Sept. 1, 2010 07:44 am

Legalized video gambling stalled

A year after passage, Illinois has yet to receive any money

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A gambling expansion that is supposed to raise $300 million a year and help pay for statewide infrastructure improvements has yet to be implemented, more than a year after it became law.

Gene O’Shea, spokesman for the Illinois Gaming Board, which regulates video gaming, says the board has no timeline for implementing the system. The Illinois Video Gaming Act, which legalizes and regulates video gambling machines, became law in July 2009. It was touted as a major part of Gov. Pat Quinn’s “Illinois Jobs Now!” capital plan, which invests $13 billion in state funds over six years to renovate public and private infrastructure statewide.

“We were originally saying it would be implemented by the end of the calendar year, but it depends on how quickly we can get people licensed,” O’Shea says. The board has begun the licensing process, which includes background checks to weed out those with criminal records or bad “reputation and associations,” according to the board’s administrative rules – essentially a measure attempting to keep organized crime from exploiting the system. O’Shea says it is unclear how many establishments statewide will actually have video gaming terminals. 

“We’re not even to that point yet,” he says. “There are a lot of technical aspects to deal with as well.” 

The state Commission on Government Forecasting and Accountability says the system is taking longer than expected, and gaming board officials told the commission in December 2009 it was still likely a year away from implementing the system. More than 50 municipalities, including the Village of Rochester, have opted out of allowing video gaming, COGFA says, and the City of Chicago has yet to officially legalize video gaming there. 

“The exclusion of Chicago would significantly compromise earlier expectations as over 33 percent of the state’s population would be affected and a similar amount of revenue,” COGFA said. 

On Aug. 12, the State of Illinois granted a contract to Scientific Games International, a New York-based company specializing in gambling technology, to create a centralized computer network allowing regulators to monitor every video gaming terminal in the state at all times. In a press release announcing the contract, Scientific Games president and CEO Michael Chambrello said Illinois’ system “could prove to be the largest video gaming network in the country.” Illinois’ contract with Scientific Games is worth an estimated $89.8 million over six years, according to the state procurement website. The same company also prints the instant tickets used in the Illinois Lottery. 

Patrick Traub, Scientific Games regional vice president of government relations, said via e-mail he could not comment on video gaming because the company is “involved in another Illinois procurement process at present, which has strict rules concerning communications.” 

Currently, video gaming in Illinois consists of unregulated machines in places like bars, truck stops and social halls, with some establishments paying out money under the table – an informal arrangement that continues while the new regulatory system is stalled. The new system is meant to channel previously illegal money into state coffers and create new revenue to pay for numerous infrastructure projects statewide. Under the new system, licensees will have to pay to own or operate gaming terminals. They will be under intense scrutiny from regulators, who will have the right to search the premises or vehicles of any licensee or applicant where evidence of breaking the law may exist. Violating the new law will be a Class 4 felony.

The state already regulates horse racing tracks and riverboat casinos. A separate measure that would have allowed slot machines at horse racing tracks died in committee earlier this year. 

Contact Patrick Yeagle at pyeagle@illinoistimes.com.
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