By NORA NEWMAN JURGENS

The state of gambling: casino nights & horse racing

THERE is nothing official from Jimmy the Greek, but the odds are getting better that Illinois will become the Las Vegas of the Midwest. Revenues generated by the state lottery continue to grow (receipts increased by about 10 percent in fiscal 1986, according to Comptroller Roland Burris). The health of the horse racing industry commands the attention of the governor and legislature. And, the passage of a bill allowing nonprofit organizations to conduct "Casino Night" events is further sign of a growing reliance on gambling as a means to raise money.

...the General Assembly decided that
such events should be legal, but critics suggest that it
is the first step toward legalizing gambling . .

For years the state's private schools and other nonprofit fraternal organizations, which have been allowed to conduct bingo games, have also been holding so-called casino nights, which are illegal. With the passage of S.B. 1552, the General Assembly decided that such events should be legal, but critics suggest that it is the first step toward legalizing gambling in Illinois.

Although Roman Catholic parishes, particularly in the city of Chicago, supported the proposed legislation, the Archbishop of Chicago, Joseph Cardinal Bernardin, expressed strong reservations. He questioned the morality of a church's reliance on any form of gambling for its funds and suggested a return to direct donations from parishioners. But judging from the heavy lobbying done this spring by local parish priests, it appears they disagree with their boss and that "Las Vegas Night" events will continue to be held as an easier way to raise money.

Government will benefit from the games, too. There is a 3 percent tax levied on gross receipts with 1 percent designated for local law enforcement agencies and the rest divided among the Illinois Department of State Police, the Office of the Attorney General, which oversees charitable fund-raising, and the Illinois Department of Revenue, which will license the games.

The bill limits casino nights to charitable organizations, which can hold four events a year. Any organization exempt from federal income taxes under Internal Revenue Service section 501(c)(3) could seek a license to conduct games, according to the bill, but there are further restrictions: The organization must have been in existence in Illinois for at least five years, and any person applying for a license cannot have been convicted of a felony within the last 10 years, have been convicted of a gambling offense, had a bingo or charitable games license revoked, or have been a professional gambler. Suppliers of gambling equipment must also be licensed.

While the usual types of casino games may be played, slot machines and other coin-operated gambling machines are not allowed. These casino nights generally have donated merchandise for prizes, but the bill allows cash prizes limited to $250 per person. There are no limits on noncash prizes.

The Illinois House tried to keep cash out of the games, fearing an open door to organized crime. But, as noted by a Senate staffer, "The days when people get excited over toasters are gone." As passed (via a conference committee report on the bill), the cash prizes were allowed though limited.

If a community does not want Las Vegas Nights, its municipal or county government may prohibit them by ordinance.

If problems do arise, expect more debate by spring 1988 since all provisions expire August 1, 1988, unless reapproved.

No show on horse racing

While Las Vegas Night gambling was approved, all bets were off for the passage of bills to improve the health of one of the state's other forms of legalized gambling — the horse racing industry. Complaining about excess taxes and dwindling revenues, representatives of the industry had been lobbying for relief since last year's veto session. (See "The October logjam," December 1985, p. 27.)

Richard Duchossois, owner of the Arlington Park Race Track, which was destroyed by fire in July 1985, led the contingent. He wants state help to build a new $675 million "equestrian community" in Lake County, which would include a track, and to turn his property in Arlington Heights into a $625 million commercial development. His proposal hinged on how much help the state would be willing to give in loans and tax breaks.

The industry as a whole has been pushing the state to decrease its tax on revenues generated by the tracks, as well as to grant the industry the right — and therefore the profits — to establish off-track betting operations.

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House Speaker Michael J. Madigan (D-30, Chicago), who has been an outspoken critic of gambling on horse races, insists that any incentives given by the state be accompanied by tighter control. Based on recommendations from the House Special Horse Racing Investigative Committee, no incentive package should be approved unless (1) horses are kept in detention barns prior to racing in order to prevent them from being drugged and (2) anyone previously convicted of stealing money from track patrons or the state is barred from employment as a parimutuel clerk.

As the end of the session neared, meetings continued between industry representatives, the governor's office and legislative leaders. It seemed that they had reached an agreement, but it did not contain intertrack betting, said to be favored by Senate President Philip J. Rock (D-8, Oak Park). Rock accused the House of subrogating the process by its refusal to vote on the Senate bill that included the proposal and by attempting to introduce a last-minute conference committee report drafted by House members. "This Senate has passed innumerable measures to help Illinois racing," Rock said. "And the House, in their audacity, has said, 'We don't like it.' "

In the end, all race track measures were left standing at the gate, as members of both chambers, accusing each other of stalling on the proposals, adjourned.

Duchossois said he cannot proceed with his plans without help from the state, yet it appeared that somewhat of an intrain-dustry squabble may have contributed to the failure of the General Assembly to accept his deal. In the midst of the negotiations, Gov. James R. Thompson told reporters, "The brass ring is coming around one more time. The folks in the racing industry better start thinking of the greater good of the industry, and less of their individual tracks and their individual bargaining positions."

With the prospect of a multimillion dollar development in northern Illinois which is expected to generate about 15,000 permanent jobs, it's very likely that an agreement could be reached in time for the November legislation session. In a state where the fourth largest source of state revenues are generated by still another form of legal gambling, the lottery, it is a safe bet that something will be done to improve the health of the horse racing industry.

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