DANVILLE — A Danville area lawmaker says online gaming could be brought to Illinois as part of negotiations to expand the number of casinos in the state and to help the horse racing industry.

Instead of permitting slot machines at racetracks — which Gov. Pat Quinn opposes — the state could help Illinois' financially struggling racing industry through some sort of online gaming, said state Rep. Chad Hays, R-Catlin.

Hays said he sat in on a recent meeting of a "working group" of lawmakers, representatives of the casino and racing industries and the governor's office. Hays, who supports expanded gambling in Illinois that would include a casino in Danville, said he was encouraged by the discussion.

"I was encouraged that the parties are at least getting together and that the governor's office has a representative in the meetings," Hays said. "As you know the governor largely sat this discussion out last year. And the feedback that I get from people on both sides of the aisle is that they're enthusiastic."

The group, including Gary Hannig, a former state representative who is now working in Gov. Pat Quinn's office, is scheduled to meet again in Springfield next week.

The key to a new deal, Hays said, could be the controversial notion of online gambling that could include anything from the sale of lottery tickets to Internet poker games.

"It was suggested that the online gambling, with the exception of the sports books, would be legal," Hays said. "I think a lot of the discussion centered around the possibility that some of that online gaming money could go to assist the horse industry. Obviously there's a long way to go but I think that some progress was made."

Until recently the federal government had insisted that all online gambling was prohibited. But a Justice Department opinion, released Dec. 23, said that only online betting on sports was banned.

It's an opinion that University of Illinois Professor John Kindt opposes.

"The effect this legal opinion will have is that it is slowly removing almost all regulatory oversight of gambling," he said earlier this month. "And once gambling is on the Internet, it's in every living room, office, school and mobile phone. And it's an economically destructive activity whish is going to cost the U.S. hundreds of billions, if not trillions, of dollars."

But Sen. Mike Frerichs, D-Champaign, said "I'm willing to look at anything farther. That doesn't mean I'll sign off on anything that's put in front of me affecting Danville. But my goal is to bring economic development and jobs to Vermilion County."

Frerichs, who also supports a casino in Danville, said he "would be open to considering different options to make that happen. We can't always get exactly what we want and so sometimes we compromise to get what we need."

Hays said the working group hoped to find an independent source that could project the amount of revenue online gambling could yield the state.

"The takeaway from the meeting is that there is a possibility that some of that new revenue, as it relates to online gaming, could be shared that would be amenable to the folks in the horse industry," he said. "I think this is progress. Previously I think there was this notion that there was just an impasse in relation to the racinos (casinos at race tracks). Although I don't think this was the first choice of the horse industry — they'll always favor the racinos — this was the first time there was discussion of another possibility in terms of revenue that could help that industry and agriculture."