States race to pass sports betting laws after Supreme Court decision
Fairmount Park race track in Collinsville will soon get its long-coveted gaming positions as part of a massive gaming expansion in the state that was passed by Illinois General Assembly over the weekend.
The infusion of new revenue that could come from having a mix of slot machines and table games could more than double the number of race days at Southern Illinois’ only horse racing track.
Gov. J.B. Pritzker has said he plans to sign the legislation, which includes adding six new casinos in the state and legalizing sports betting.
Fairmount Park President Brian Zander said the park could employ an additional 300 full-time positions with its allowance of 900 gaming positions.
Zander said establishing Fairmount as a “racino” could see the track become a destination.
There is a memorandum of understanding between Fairmount and the Casino Queen, for the East St. Louis casino, or a subsidiary, to manage the gaming operations at the racetrack. The Casino Queen would help with the licensing and construction process as well. Zander said the Casino Queen is essentially being hired by Fairmount Park for a period of 10 years and could receive a share of the profits on a sliding scale up to 25 percent.
“It’s great for Fairmount and the horsemen that we would be getting gaming, but at the expense of the Queen wouldn’t have been a good thing,” Zander said.
A request for comment from the Casino Queen wasn’t immediately returned.
With the new revenue sources, Fairmount would have to run at least 700 races a year, according to the legislation. With seven races per race day, it would work out to 100 racing days every season. This year, Fairmount has 41 live racing days.
Zander said he expects the purses to nearly double, which would help attract more horse owners to the track.
“There’s certainly an interest in terms of the local people just expanding their stables, and we’ll have a much better shot at stables racing in other states when that happens,” Zander said.
As for when construction on a racino structure would begin will depend on when the state’s gaming board formalizes rules for racinos.
“It will determine how quickly we can move and how quickly we can become licensed,” Zander said. “I don’t anticipate any problems with the funding or the license fees.”
Zander added there is a desire to use the track’s 22-acre infield for concerts and events.
“This will transform obviously Fairmount Park from what it is to something we think is very special,” Zander said. “I think it will transform the city of Collinsville into a destination.”
However, not all in the gaming industry are happy with gambling expansion, which passed with an 87-27 vote in the House, and a 46-10 in the Senate.
More casinos, more gaming positions allowed
Local casinos may suffer as there could be further cannibalization, said Tom Swoick, executive director of the Illinois Casino Gaming Association.
Casinos will be able to expand to 2,000 positions in the state, up from 1,200.
But whether places such as the Casino Queen in East St. Louis and Alton Argosy use those positions remains to be seen, as not all of their positions are played now.
Swoick doesn’t believe the casinos will take advantage of being allowed to have more positions, which would cost an initial $17,500 fee for each.
“The positions are there, but no one is playing them,” Swoick said. “Adding the additional positions, when you can’t fill the positions you’ve got at a cost of $17,500 for each one, doesn’t make a whole lot of sense.”
He said the St. Louis-area already may have too many gaming options.
“That whole metro area there, with all of the casinos on the other side over in Missouri, it’s pretty well saturated, probably over saturated,” Swoick said.
There also would be six new casinos in the state, including one in Walker’s Bluff in Williamson County in Southern Illinois as well as one in Chicago.
Bill sponsor state Rep. Robert Rita, D-Blue Island, said by charging a $17,500 licensing fee, and $30,000 for a Chicago casino, for each new gambling position at any casino, the state stands to reap hundreds of millions in revenue on top of increased yearly tax revenue.
Under the gaming bill, sports betting would be legalized, but betting on college teams in Illinois would not be allowed.
The existing and new Illinois casinos, racetracks and sports venues would be able to get sports betting licenses, which would range from $3.2 million to $10 million.
In the first 18 months of legal sports gambling, those venues would be able to partner with an online platform to provide mobile sports betting. After 18 months, the state would make available three online sports betting licenses for $20 million each, so that an online vendor could provide betting without being connected to a brick-and-mortar location.
Sports betting would be taxed by the state at 15 percent.
Money from the gaming bill would go toward “vertical construction” and maintenance for state facilities. The gaming expansion could bring in $350 million a year to pay for a statewide infrastructure plan, Senate Democrats said.
The gaming legislation also included a $1-per-pack cigarette tax increase, as well as a parking tax. The revenue package also included a mechanism to allow state and local communities to collect sales tax on online purchases from out-of-state retailers.
Revenue for local communities
The gaming bill also included provisions to provide much-needed revenue for surrounding communities.
A portion of the admission tax at Fairmount Park would also go to Alorton, Washington Park, State Park Place, Fairmont City, Centreville, Brooklyn, Venice, Madison, Caseyville and Pontoon Beach.
Also, 5 percent of adjusted gross receipts at Fairmount Park would be split between East St. Louis, Alton and Collinsville, under the proposal. East St. Louis and Alton would each get 30 percent of that revenue. Collinsville would get 40 percent of the local share of adjusted gross receipts. Money to East St. Louis and Alton is meant to help those communities, which may be hurt by Fairmount Park becoming a racino.
The gaming expansion bill also included increases in video gaming, which is legal in taverns, truck stops and fraternal organizations.
Video gaming taxes are increased from current 30 percent to 33 percent in first year, 34 percent in the second year and beyond. That is different than the progressive tax of net terminal income over $2.5 million to be taxed at 50 percent, which the governor sought.
Video gaming would be allowed to expand through increased maximum bets from $2 to $4, a six-machine maximum at video gaming locations (up from five machines), and progressive jackpots. Truck stops with at least 50,000 gallons or more of fuel sold can have up to 10 video gaming terminals under the proposal.
Pritzker has wanted sports betting legalized in the state as a way to help replenish state coffers.
“Legalizing sports betting and expanding gaming will create jobs up and down the state, from Rockford to Chicago to Walker’s Bluff, where communities hungry for employment will see 10,000 new jobs,” Pritzker said. “After the Supreme Court legalized sports betting, I promised the people of Illinois that sports wagering would be a key element of my legislative agenda, so that we are competitive with our neighboring states and can create more revenue for communities around Illinois.”
How metro-east legislators voted
State Rep. Monica Bristow, D-Godfrey: No
State Rep. LaToya Greenwood, D-East St. Louis: Yes
State Rep. Jay Hoffman, D-Swansea: Yes
State Rep: Charlie Meier, R-Okawville: Yes
State Rep: Nathan Reitz, D-Steeleville: Yes
State Rep. Katie Stuart, D-Edwardsville: Yes
State Rep. Blaine Wilhour, R-Beecher City: No
State Sen. Christopher Belt, D-Cahokia: Yes
State Sen. Rachelle Aud Crowe, D-Glen Carbon: Yes
State Sen. Jason Plummer, R-Edwardsville: No
State Sen. Paul Schimpf, R-Waterloo: No