COMPTROLLER'S CORNER RIVERBOAT GAMBLING: A BOON TO SOME LOCAL GOVERNMENTS By Loleta A. Didrickson, Comptroller, State of Illinois

The allure of riverboat gambling can be quite powerful for local governments. One need only look at the enormous revenues generated by riverboats in Illinois to understand the appeal. Illinois riverboats reached nearly $1 billion in adjusted gross receipts in 1994. The Comptroller's Office watches closely any business that has an economic impact on state and local governments.

The state and the 10 local governments where the riverboats are located split the tax revenues that the industry collects. There is a $2 tax per admission which is divided evenly between the state and the municipality. This tax is usually incorporated into the riverboat's admission price.

The Riverboat Gambling Act of 1990 also calls for a 20% tax on adjusted gross receipts. Of this 20%, the local government unit receives one-fourth, and the remaining three-fourths is retained by the State.

Riverboat gambling has become a popular pastime for midwesterners, and this has brought needed revenue to some Illinois local governments. In calendar year 1991, with riverboat gambling facilities open in Alton and East Peoria, the local government share was over $1 million.

That number rose to $15 million in 1992 as three more locations opened in Illinois. Revenues increased to over $40 million in 1993 as the number of riverboat operations increased to eight with new facilities in Metropolis, Aurora and East St. Louis.

The last riverboat opened in Elgin in 1994 and total revenues in calendar year 1994 neared $70 million for all local governments. Cumulative local revenues from riverboat gambling exceeded $126 million from its inception in September of 1991 to March of 1995.

Most riverboat revenues are used for the financing, promotion and enhancement of local government operations and facilities. Capital improvements are the number one use for the majority of local governments.

Examples of other programs financed by riverboat revenues include Metropolis' plan to lower taxes for their residents, Joliet's social program to rehabilitate gang members, Jo Daviess County's sewer and water project and East Peoria's neighborhood watch program. Municipalities also use the funds for the repayment of debts, financial support for police and fire operations and public utility repairs.

The unknowns of the future include the prospect of additional riverboat licenses and continued debate over how many is too much for the market to bear, as well as on-going philosophical discussions over the value of gambling as an economic tool.

November 1995 / Illinois Municipal Review / Page 7