Tuesday, October 6, 2009

County and Union leaders react to Gainer's conflicted video gaming ban plan

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Union officials urge County Board to delay today’s vote
By Ray Hanania

A proposal by newly appointed Cook County Commissioner Bridget Gainer to ban video gaming machines is bad for taxpayers, bad for the county and questionable because of her financial ties to the state’s casino industry, county officials and industry leaders said.

Officials of the Illinois Coin Machine Operators Association called on the county board to delay a vote on the ban which is scheduled for this morning (Tuesday Oct. 6) based on disclosures that Gainer received financial donations from casino related interests and concern for the county budget and state jobs.

Gainer, who was appointed by Chicago Machine committeemen to succeed Mike Quigley in the 10th district in Chicago, received at least $2,000 from casino-related interests to her election campaign committee three weeks before proposing the video gaming machine ban.

Video gaming is the heart of Gov. Pat Quinn plan to fund a $31 billion capital improvements program for the state. It would allow up to 45,000 video machines to be placed in establishments with liquor licenses. As much as $500,000 annually could be raised by financially-strapped suburban communities through licensing.

A spokesman for the Illinois Gaming Association, which represents 7 of the state’s 10 licensed casinos, added said the bill would siphon some revenues from casinos in the state, but that the IGA has not taken a stand against the legislation.

Chris Geovanis, a spokesman for Cook County Board President Todd Stroger, said Gainer’s bill would also take away funds needed for county expenses. She said banning the video machines could cost Cook County millions of dollars in lost state discretionary funds. Geovanis said that while Stroger has no comment on funds Gainer, the sponsor of the video gaming legislation, has received from casino related interested, the county is “concerned by the money that taxpayers will lose” if video gaming machines are banned.

“There is a concern the ban will have a revenue impact. The state has been pushing very hard on the counties not to ban video gaming because it is revenue for them,” Geovanis said.

“But there is a concern that if the discretionary funds they would normally provide to home rule entities like Cook County will be withheld. There is concern that if the board does move to ban video gaming under Gainer’s terms, the board should take into consideration the revenue impact that might run from tens of millions of lost dollars to hundreds of millions of lost dollars.”
ICMOA officials said that they plan to protest at Tuesday’s board meeting.
“Video gaming is critical to funding the Illinois Capital Bill, which was finally pushed through after a decade of debate over how to pay for improvements to our state’s deteriorating infrastructure,” said Tom Fiedler, president of the Illinois Coin Machine Operators Association, Morris, Ill.

“The idea that kicking the gaming act back to the General Assembly will force a more palatable funding solution is laughable  … It’s taken 10 years to get this far. In a state that has lost nearly 325,000 jobs since the start of the recession, can the thousands who would be put back to work by the capital bill afford to wait?

Mike Pappas, ICMOA executive director said, “This bill was fast-tracked and introduced even before the Illinois Gaming Board could come out with the rules and regulations about the video gaming machine legislation,” said Mike Pappas, executive director of the Illinois Coin Machine Operators Association.

“The Illinois Gaming Board is the most respected board in the country and they haven’t even finished detailing how this law will be applied. Before they even can act, the county has moved to ban it. It doesn’t sound right.”

Pappas made his comments Monday during an interview on Radio Chicagoland WJJG 1530 AM. He called the board’s intention to ban the video gaming machines “a rush to judgment.”

Pappas said he first heard about Gainer’s bill only six days before it was brought before the Cook County Finance Committee.

“This ordinance hurts the suburban community but it also hurts everyone in Cook County no matter what district you represent as a commissioner,” Pappas said.

Pappas said studies show that Quinn’s Capital Improvement Plan, which depends on the video machine gaming component to generate the $31 billion, would create 439,000 jobs in Illinois and provide some $3.58 billion in transportation, $3.6 billion for lower education improvement and help impoverished areas of Cook County.

“The video gaming act is going to fund significant improvements and create more jobs, jobs, jobs to quote Governor Quinn,” Pappas said.

Asked about Gainer receiving funds from two executive of the 10th Casino licensee, Midwest Gaming & Entertainment LLC, Pappas said that the vote might have been different at the Finance Committee if other commissioners knew.

Tom Swoik, the executive director of the Illinois Gaming Association, which represents seven of the state’s 10 casino gaming licensees, said that Gainer’s bill would siphon money from the casino industry at a time when the economy is at its worst.

But, he said that when Quinn introduced the legislation, the IGA did not oppose it.

“When [Quinn’s] legislation went through, the association and its members did not oppose this legislation. But this is probably the strongest we have seen. It has more regulations in it. It will be administered by the Illinois Gaming Board. The problem is there is no money in the bill to get this up and running,” Swoik said.

Swoik also questioned the county’s motives saying that Quinn’s bill gives voters in municipalities and unincorporated areas the option to ban the machines in their communities.

But Swoik acknowledged that a prior cigarette ban in the state has dramatically impacted the revenues paid by the seven casino members of the IGA.

“The cigarette ban impacted our casino revenues dramatically and what we returned to the state and to local communities,” Swiok said.

He said prior to the cigarette ban, casinos paid $718 million to state and $116 million to local communities. After the ban was approved, casino revenues dropped and they only paid $473 million to the state and $93 million to communities.

“It was a 20percent drop in revenues,” Swoik said, noting the economy has also dragged down casino revenues 8 percent this year.

In a Sept. 24 letter to Cook County Commissioner Earlean Collins, Chicago Federation of Labor President Dennis J. Gannon said: “Without collecting revenue from video gaming, the capital program will fall short of the necessary funding to improve our communities and put hundreds of thousands  of men and women to work.”

In an earlier letter to the Kane County Board, the Transportation for Illinois Coalition stated, “Despite the political momentum behind local ordinances to ban video poker, [we] remain supportive of video poker as a revenue source for capital construction.”  

Gainer has refused to respond to repeated queries to comment about the donations she has received.

On June 30, 2009, Gainer’s election campaign received $1,000 from Leslie Bluhm. Bluhm is listed on Gainer’s disclosure forms as working with “Lamb Partners.” On the same day, Gainer also received $1,000 from Gregory Carlin, who is also listed as an executive with at Lamb Partners.

Leslie Bluhm is the daughter of Midwest Gaming Chairman Neil Bluhm, and she is also a “partner” in Midwest Gaming. Gregory Carlin is President of Midwest Gaming. Neil Bluhm has many corporate interests in Illinois including Lamb Partners. He is also president of JMB Realty Corporation.

Gainer’s legislation was fast-tracked through the county board over the objections of several commissioners who asked that public hearings be held first. In fact, no "public hearings" were held on Gainer’s bill which sat dormant in the Finance Committee until Gainer asked Finance Committee Chairman John Daley to put the bill on an agenda for a vote. That vote was taken last Thursday, October 1, 2009 immediately after a few members of the public, last minute, were allowed to speak on the issue. It is scheduled to be voted on by the full board Tuesday (Oct. 6, 2009).

Click here to read yesterday’s story on casino gaming donations to Gainer.

-- Ray Hanania

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