Danville officials still hoping for casino
DANVILLE — When Jim Fletcher called to book his usual spot on the every-other-Wednesday charter to East Peoria two weeks ago, he was disappointed to discover the bus company he used had gone out of business.
The Oakwood retiree has been a twice-a-month regular, taking advantage of the cheap rate — transportation to and from the Par-a-Dice casino, plus lunch, for just $5. Everything he needs — except the bucket of chips.
"It's like giving you a ride for nothing," Fletcher said.
Rather than wait for Par-a-Dice to find a new busing service to shuttle Vermilion County residents two hours each way, Fletcher plans to just drive himself to Peoria on Wednesday. How much more convenient would it be if he didn't have to go out of town to gamble — if tour buses full of day-trippers came to Danville instead of leaving the city?
That's the dream of local politicians, who are working to lure a riverboat casino to their backyard.
"I think Danville very much remains in the discussion," says state Rep. Chad Hays, R-Catlin.
Hays spoke from Springfield, where last week state legislators heard two proposals for expanded gaming in Illinois. One would put a new, state-owned casino in Chicago. Another calls for a Chicagoland casino plus the granting of additional licenses to four other counties, including Vermilion.
Hays believes the final version of a gaming expansion bill won't look like either of the current options. He predicts that discussions will continue throughout the spring, with a vote taking place after the November election.
Danville remains solidly in the discussion, he says. "And it's the same as it's been since I've been here: It's less about gaming than economic development."
Right time, right city?
Hays and Danville Mayor Scott Eisenhauer both believe a casino would bring an infusion of money into the area, as well as both temporary and permanent jobs.
Even though gross receipts for all Illinois riverboat casinos declined last year — from $1.6 billion in 2012 to $1.5 billion in 2013 — the millions in tax revenue that flow to local governments is still very attractive, especially for cities like Danville that are struggling to balance budgets.
East Peoria's Par-A-Dice casino put $6.4 million into local government coffers last year, and that was down almost 8 percent from the previous year. That amount rivals Danville's largest revenue stream — local sales tax, which is expected to total about $8.5 million at the end of this fiscal year.
Eisenhauer says he would not use casino revenue for day-to-day operational costs, because other cities that have tried it suffered when revenues declined. The mayor would instead use the money for one-time expenses, like capital purchases, infrastructure development and quality of life improvements.
"I have not earmarked projects, but I know there are things we want to accomplish within this city that we just don't have the money to do now," he said.
In addition to extra city money, Eisenhauer said, a casino would generate temporary construction jobs, for starters, followed by several hundred full-time positions.
"The myth that they'd all be minimum-wage jobs simply isn't true," he said, "and that's based upon discussions with developers and owners of other casinos in the state."
According to data from the Illinois Department of Employment Security, about 4,400 people in Vermilion County were out of work and looking for a job in January while 30,886 were employed.
The county's unemployment rate was 12.5 percent, up from 11.9 percent at the same time a year ago. It was even higher in Danville — 13.4 percent, up from 12.6 one year earlier.
Do casinos help spur a city's economy and create jobs? Depends on whom you ask.
For 20 years, John Kindt has done research specializing in the societal, business and economic impacts of gambling. The University of Illinois business professor emeritus is a renowned expert on the topic of expansion, testifying last fall before the state gaming board.
According to Kindt, casinos take money out of the economy that would normally be spent in retail and other sectors. And that costs jobs, he argues.
The gambling industry's pitch — that casinos create economic stimulus — is "totally industry hype," Kindt says.
"When people are dumping millions into slots, it's taking money out of the consumer economy. It's draining money from cars, refrigerators, computers," he said. "Every reputable economist gets it."
A new casino opening in an area with a high unemployment rate could be both good and bad from a casino developer's perspective, says Steve Marshall, senior vice president of the Las Vegas-based Fine Point Group, an independent organization of casino managers and consultants.
Marshall is familiar with Illinois' gaming industry, having worked in Joliet, and says it would be "a big win" for a new casino if there was a ready pool of employees.
But high unemployment often equals lower revenue streams, he added: "People who don't have jobs typically don't gamble."
What would help a Danville-based casino, Marshall says, is its ability to draw gamblers from other markets nearby. The city's proximity to Champaign-Urbana would be a plus, as would its ability to pull in out-of-state revenue from Indiana residents who cross the state line to bet.
Luring out-of-town and out-of-state patrons would also generate secondary revenue for other businesses and vendors in Danville, Marshall says.
"It sort of has a multiplier effect," he said.
Whether Danville would be attractive to casino developers, Marshall says, would depend partly on how much the state charges for the casino license. Two land-based casinos in Indiana ran into trouble with heavy upfront licensing fees, he said.
Kindt says the free-market value of a casino gaming license in a populated area like Chicago would be worth $500 million. But in the proposed gaming expansion legislation, revenue-strapped Illinois would charge $100,000 for each new license.
Kindt believes Danville's proximity to the UI is another key, because young people are a prime market for the casino industry.
"The younger electronic generation are more susceptible and less educated about the dangers of gambling addiction," he said.
Ten casinos and counting
In 1990, Illinois became the second state to legalize riverboat gambling. The Riverboat Gambling Act authorized 10 licenses for casinos that would cruise Illinois waterways with up to 1,200 gaming positions each, including both electronic and table games.
By 1999, casinos were allowed to permanently moor at dock sites, but players were required to be 21 to enter gambling areas.
All 10 licenses are still active today.
The state's first riverboat casino — the Argosy — began operating in Alton in 1991. In the early days, city treasurer Cindy Roth remembers, the casino pulled in players from St. Louis. But now, she says, the Argosy's primary competition is across the Mississippi River in Missouri — from the casinos in St. Louis, not from possible expansion in Illinois.
Roth said Alton's 5 percent share of the casino's gross receipts peaked at $8.3 million in 2001 but has steadily fallen since 2007. Last year brought in $3.8 million. And Roth doesn't anticipate that number growing, considering all that has changed since opening day.
In 2008, with the economy in recession, Missouri lifted its loss limits, which Roth said had stopped gamblers from betting after losing a certain amount. That same year, she said, Illinois' smoking ban went into effect. Combined, the factors all had a negative affect on casino admissions at the Argosy, which just last month cut back hours of operation in some areas of its facility.
"We called it the triple whammy," Roth said. "We were really affected by all that."
Filling a 'void'
A Danville casino wouldn't have competition nearby, Eisenhauer said, making an Alton scenario less likely in his city. The closest current casino across the state line is in the Indianapolis area.
So far, the mayor describes city officials' conversations with casino developers as very generic. If talks progressed, Eisenhauer says it's likely that the city would endorse one, then apply for a state license to operate in Danville.
As for where a casino would be built, Eisenhauer will say only that the site would have to be in the city limits, close to Interstate 74, and that there would need to be infrastructure already in place. According to the latest proposed state legislation, a casino would also have to be built on water — but that could be a man-made body, he said.
"I think when you talk to anybody, the Danville facility makes a lot of sense in that it's right on the Indiana state line, and if you look at Danville in comparison to other gaming facilities in Illinois and Indiana, you recognize we are in an area void of gaming facilities," he said.
Eisenhauer says the ideal timeline would be for gaming expansion to pass the legislature this spring; for the governor to sign it into law this summer; and for the city to finalize discussions with a developer and move forward with an application this fall or winter. If approved, it'd then be on to site selection and construction.
One interesting part of the bill as it stands today, Eisenhauer says, is that a temporary location can open for business while the permanent facility is being built.
Where does Oakwood's Jim Fletcher sign up?
"I'd go up there and kill an hour or two every day," he said.