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Thursday, July 14, 2011 12:14 pm

Gambling on the fairgrounds

How slot machines and harness racing could change Springfield forever

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Horsemen run their horses on the Illinois State Fairgrounds track during qualifying races held by the Illinois Standardbred Owners and Breeders Association.
PHOTO BY PATRICK YEAGLE

Step right up! Welcome to the Illinois State Fairgrounds, where kids can milk cows, and cows can win ribbons and anyone 21 years and older can contribute to an electronic, press-a-button, hear-a-beep, wait-to-(probably)-lose-while-it-looks-like-you’re-winning casino king’s cash cow – the slot machine.

Gambling opponents say that’s what Springfield should expect to see if Gov. Pat Quinn signs a proposed gambling expansion measure that would allow racetracks, including the state fairgrounds in Springfield, to become “racinos,” where the addition of hundreds of slot machines, available year-round, would draw more gamblers to increasingly less popular horse races.

“It’s going to be like a full-blown casino,” Anita Bedell says of proposed changes to the fairgrounds. Bedell is the executive director of the Illinois Church Action on Alcohol and Addiction Problems (ILCAAAP), which opposes any gambling expansion. “They say they’re going to have horse racing three to nine months a year, and I don’t know if people understand there’s going to be casino gambling year-round – 900 gambling positions.” An electronic gaming device, like those slated for racetracks in the proposed gambling expansion, counts as one “position.” Existing Illinois casinos are now only allowed to have 1,200 gambling positions, which include electronic gaming devices but also other games such as craps tables, which count as 10 positions each.

The measure would also allow the city of Chicago and four other Illinois communities to host new casinos and authorize more gambling positions at existing casinos. Combine all of the proposed new gambling together, and Illinois’ maximum gambling capacity would increase from about 12,000 positions to more than 38,000 positions, putting Illinois in 20th place for states with the most machines per resident.

Bedell and other opponents say the proposed changes will create more gambling addicts, causing more costly social problems that will outweigh any revenue enhancements expected from the expansion. But not everyone shares Bedell’s concerns about the proposed expansion, including Springfield’s Mayor Mike Houston.

“I would support anything that is going to create activity and excitement at the Illinois State Fairgrounds,” Houston says, adding that “overall, it would be a good thing for the city.”

Houston rejects Bedell’s claim that proposed changes at the fairgrounds would be like putting a casino in Springfield. “We’re not talking about a full-fledged casino and I think that is an important distinguishing factor,” Houston says. “You have things other than slot machines at a casino.”

He also notes that some Springfield residents travel to riverboats like Par-A-Dice Casino, outside of Peoria, to gamble. “I think that if there are people who are having problems with gambling, they are having problems in the city of Springfield today. They are just using riverboats.”

It’s a sentiment echoed by agricultural interests, which expect to get millions of dollars in additional funding, should the measure become law in its current form.

The Grandstand looks over the fairgrounds’ dirt racetrack.
PHOTO BY PATRICK YEAGLE


“I’m not a big fan [of gambling], but it’s already here, so I feel that agriculture might as well get their share of the money,” says Tom Moore, president of the Illinois Association of Agricultural Fairs. Moore, of Jerseyville, lives about 20 miles away from an Alton casino and about 30 miles away from Missouri casinos. He says he hasn’t noticed any major social problems in his area associated with gambling, but he has watched county fairs decline with state funding cuts and the horse-racing industry decline, taking with it agricultural livelihoods. The proposed gambling expansion is expected to bring in about $5 million each year for county fairs across Illinois.

“About a third of the fairs actually have horse racing used as a training ground for the horses to go on to the big tracks,” Moore says. “So the racing industry needs county fairs.” He adds that rural communities need the business county fairs bring to them each year.

Though no estimates are available, some of the increased revenue realized by expanded gambling would go toward infrastructure improvements at the fairgrounds.

Whether the expanded gambling package goes into effect as it was approved by the General Assembly is still up in the air. Quinn has called the legislation “top heavy” and “excessive,” and has specifically called out the state fairgrounds portion of the measure as an item of concern, according to the State Journal-Register. Quinn’s spokesperson says he’s still weighing all sides of the matter, and he continues to meet with lawmakers, lobbyists and the general public.

The hurting horse industry
The proposed gambling expansion would bring in to the state treasury about $1.5 billion in one-time fees plus about $500 million annually to help pay the state’s bills, says the measure’s sponsor, Skokie Democrat Rep. Lou Lang. Some of the increased state revenues would go to various agricultural causes, including FFA and county fairs, while some of it would go toward depressed community grant funds, foreclosure prevention and paying the state’s backlog of bills. But the primary factor behind bringing slot machines to racetracks, Lang says, is boosting the horse-racing industry to save an estimated 40,000 jobs. “At its core it’s about purses,” Lang says. “As you build purses, it filters down to everybody in the industry.”

A purse is the prize money divvied up among horse-race winners. The total horse-racing purse distributed in Illinois in 2010 amounted to less than $54.4 million, the lowest in decades, and less than half of a 2002 peak of $119 million, according to the Illinois Racing Board. By comparison, Pennsylvania in 2009 had a total purse of $230.5 million, up from $56 million in 2006, when that state first authorized racinos, according to a report by the Pennsylvania Gaming Control Board.

The sharp decrease in Illinois has translated into fewer and fewer jobs, racino proponents say. “Horsemen follow the money. Breeders follow the money. Many of our better trainers, drivers, many of our owners, are beginning to invest in these other states,” says Tony Somone, executive director of the Illinois Harness Horsemen’s Association. “What really hurt in the last five, six, seven years, is other states have allowed their racetracks to get slot machines. The new word today is ‘racinos.’”

Springfield Republican Rep. Raymond Poe introduced legislation in 2008 that would not have necessarily included slot machines but would have lengthened the horse-racing season at the state fairgrounds to extend beyond its current six days during the State Fair. The measure was unsuccessful then, but is getting another shot as part of Lang’s bill, Senate Bill 744, this time with slot machines.

Could Springfield support expanded racing without the slots? “No,” Poe says. “There’s just not enough money in the horse racing, in drawing enough people out.”

Dr. Ken Walker and his employee Barb Olsen work with horse Determination Plus on Walker’s breeding farm in Sherman.
PHOTO BY RACHEL WELLS


It’s a sentiment reluctantly shared by the owners of a local horse-breeding farm, Walker Standardbreds, in Sherman. Pat and Ken  Walker remember the days when race horses had the kind of fame athletes on Wheaties boxes have today. Back then, kids treasured posters of their favorite equine and flocked to see a winning horse as its train stopped through town. Harness racing started, Pat Walker says, when neighbors challenged each other on rides home from church.

“Sadly enough, we’ve gone from trying to figure out how to entertain ourselves, to having entertainment shoved down your throat in any which direction that you go. When you had the time, and wanted to find something to do, it was fun to go to the races,” Pat Walker says. “Now, people want to be entertained every moment of their lives. We just have to have everything going fast and furious.”

As examples of younger generations’ style of entertainment, she points to slot machines – a major component of casinos, which the Illinois horse-racing industry blames in part for its near – and perhaps pending – demise. But it’s on that very style of entertainment agricultural interests including the Walkers are placing their bets for the future of the horse-racing industry, as they push Quinn to sign the gambling expansion proposal.

In recent years, the health of the Walkers’ business, like that of others in their industry, has declined dramatically. They now breed about 250 mares each year, down from a one-time high of about 500 in the mid-1980s. Then, they employed about 30 people during the farm’s peak season. Now, the Walkers only employ about 15.

“We’ve taken a gamble thinking we would get this up to this point,” Ken Walker says about the racino legislation approved by the General Assembly in May. He says that, if the gaming expansion doesn’t pass, and horse owners and trainers continue to flee Illinois, he’ll lose about $100,000 just by staying in business this year, in addition to a loss of nearly $50,000 last year.

Slots, slots, slots
But while Illinois lawmakers and the horse-racing industry focus on pairing slot machines with racetracks to keep the labor-intensive form of gambling afloat, University of Illinois at Urbana-Champaign professor John Kindt says that’s the last thing they should be doing. Kindt is the editor of the 2008-2010 United States Gambling Reports and teaches business and legal policy at UIUC.

He cites a 1999 report by the U.S. National Gambling Impact Study Commission, which was created following a push by the now deceased U. S. Sen. Paul Simon, the father of Quinn’s handpicked lieutenant governor Sheila Simon. The commission recommended that “states should refuse to allow the introduction of casino-style gambling into pari-mutuel facilities for the primary purpose of saving a pari-mutuel facility that the market has determined no longer serves the community or for the purpose of competing with other forms of gambling.” In other words, adding slot machines to save unpopular racetracks is the wrong way to go, according to the commission.

“The new legislation is pushing slot machines. It’s all about the slot machines,” Kindt says, noting that electronic gaming machines like those proposed for racetracks are the most addicting, especially for younger generations. “People promoting slot machines are trying to misdirect the public, the politicians, to focusing on the wrong issues.” He says the discussion surrounding expanded gambling in Illinois is rife with red herrings – from agricultural funding and jobs to community development – that distract from what he says is clear-cut economic analysis.

In Pennsylvania, for instance, the purses may have increased with the introduction of slots to racetracks, but each year betting on actual races continues to decline. The Pennsylvania Gaming Control Board reports that the state’s total handle – the total amount wagered on horse racing – declined by nearly 25 percent from 2006 to 2009, from $974.8 million to $733.8 million. Each year, more and more of the purse money that supports horse racing comes from slot machines.

Slot machines would help support Illinois’ horse-racing industry if Gov. Pat Quinn signs a measure expanding gambling in the state.


Kindt likens horse racing to videotapes that have now been replaced by DVDs and Internet streaming. “There are people who still want to play VHS tapes, but the world has moved on. VHS tapes are becoming obsolete. Horse racing in this country is becoming obsolete,” he says. “The only way they can save it is by going to slot machines.”

Illinois’ gambling legislation sponsor Lang says he’s taken precautions to ensure that Illinois’ horse-racing industry doesn’t become totally reliant on slot machines. The legislation includes a measure requiring racinos to spend a portion of their proceeds on marketing the horse industry.

Kindt says that, for every $1 in projected revenue from slot machines, communities incur $3 in direct and indirect social and regulatory costs. “Should taxpayers be propping up nonproductive activities?” Kindt asks.

The 1999 gambling impact study conceded that opening a casino in a depressed area can bring in new jobs but not necessarily better jobs. The commission concluded: “There appears to be more of a shift in the types and locations of work than a net improvement in the local standard of living.” The study also found that the number of problem gamblers within a 50-mile radius of a casino is double that of those further away and that problem or pathological gamblers account for about 15 percent of the money spent on gambling.

Lang says studies don’t match the real-life experiences of communities that already host casinos. “I would be foolish if I said we won’t have problem gamblers if we have gambling, but we already have gambling in Illinois,” he says, arguing that Illinois’ problem gamblers are just going to other states to gamble and bringing their problems home to Illinois. “I am not persuaded, nor do I see any evidence whatsoever that additional gambling in our state will lead to a huge influx of problem gamblers.”

UIUC economics professor Fred Gottheil says a community encouraging casino development is the same as encouraging a drug dealer to set up shop. Both “industries” create economic activity, but both come with significant social costs.

“We’re up in arms against the drug industry, and people in the drug industry would shrug their shoulders and say, ‘Why pick on me? I’m doing exactly what the casinos are doing. I’m bringing employment to the community,’” Gottheil says. “Well, that’s not the kind of employment we want, and that’s what it boils down to – what do we want?”

Rev. Shaughneysy Small, who retired about 10 years ago from Capital City Church of God, says Sangamon County voters have already told lawmakers what they want – a voice in the matter. In 1994, Small chaired the group Citizens for Voter Choice, which successfully pushed for a ballot referendum asking voters if they wanted the power to decide if the county would expand gambling. At the time, developers were eyeing the Sangamon River as a possible location for a casino if the Illinois legislature approved gambling expansion. About 90 percent of Sangamon County voters said they did want the final say.

The referendum “had no teeth” and wasn’t a vote on whether to expand gambling – just whether voters should have a say. But Small says it was still worthwhile. “That 90 percent came out, and that was a good thing for the city to see.”

Anita Bedell is the executive director of the Illinois Church Action on Alcohol and Addiction Problems, which has been fighting gambling since 1992.
PHOTO BY RACHEL WELLS


Rep. Lang says the time to debate the morality of gambling has long since passed. “If we had no gaming in Illinois, then I would say … ‘Let’s have that debate.’ But we’ve had gambling in Illinois for many, many years.” He adds that the measure calls for $10 million in social programming to combat any gambling addiction issues.

But Bedell is quick to note that the sum is “subject to appropriation,” meaning the money doesn’t automatically go to those programs – lawmakers must have the will to specifically designate the funds year after year.

Quinn’s call
Lang says he’s had a lengthy meeting with the governor since the legislation passed the General Assembly in May but that Quinn gave no indication of what he would do. Lang says the meeting was “mostly a fact-finding session.”

Whatever Quinn does decide to do, Lang says any changes would be tricky.

“I do not believe that you will ever get legislators from a community that has been given gaming in this bill to vote for anything that would take it away from them,” Lang says. “I think it would be very difficult to make changes in this bill and have votes sufficient to pass it.”

As of a week ago, Gov. Quinn’s office had received more than 8,200 calls, emails and letters in favor of the proposed gambling expansion and about 2,500 calls opposed. His office has also seen 3,455 petition signatures against the legislation versus 32 in support.

Spokesperson for the governor, Annie Thompson, says Quinn is still undecided on what to do with the measure, but it could be months before Quinn actually gets to officially weigh in on the legislation. The legislature is holding off sending the measure to the governor’s office as lawmakers, lobbyists and the public meet with Quinn to discuss the bill, which calls for expanded gambling far beyond the Springfield fairgrounds.

In the meantime, those on either side of the debate are eagerly awaiting the final outcome.

“We’ve taken a gamble thinking we would get this up to this point,” Ken Walker says, noting the $100,000 he’s expecting to lose this year to keep his horse farm running if the measure doesn’t pass. “You can only do that for so long before you have to change the name of the game.”

Bedell, on the other hand, is hoping Quinn will veto the entire measure. “This will be his legacy if he signs this. They won’t remember anything else he does, but he will be the gambling governor,” she says. “That will be his legacy.”

Contact Rachel Wells at rwells@illinoistimes.com.

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