Illinois casino OK still must face governor

SPRINGFIELD, Ill. - Illinois lawmakers have approved a major expansion of legalized gambling for the second year in a row.

The Senate voted 30-26 late Thursday for a proposal to create five new casinos - a land-based site in Chicago and four on riverboats. It also would allow slot machines at horse racing tracks to help that ailing industry.

The bill could produce at least $300 million in tax revenue for the state annually. Proponents have said that could go as high as $1 billion a year, not counting a one-time infusion of more than $1 billion from licensing and a special tax.

Critics argued the gambling market is saturated and new casinos would just take business from the 10 existing ones.

Deutsche Bank gaming analyst Andrew Zarnett said there is little chance Gov. Pat Quinn would sign the measure. He said the bill would damage existing casino operators in Illinois and neighboring Indiana.

"The proposed expansion by Illinois lawmakers is yet another example of gaming saturation," Zarnett said in a note to investors. "Not only will this excess capacity take away share from existing operators, but it may also significantly heighten the promotional landscape in the region."

Caesars, which operates the Harrah's Joliet and Metropolis casinos in Illinois and the Horseshoe Hammond in Indiana, would see "a major impact from the newer casinos in Illinois."

Senate President John Cullerton, D-Chicago, predicted a veto but said lawmakers would pass another version.

The Legislature adopted a similar measure last year but never sent it to Quinn, fearing his veto. While backers said the current bill addresses many of his concerns, Quinn says it has too little oversight and too much opportunity for political corruption.

Review-Journal writer Howard Stutz contributed to this report.