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Best of John G. Brokopp
Tough Feeling Sorry for Illinois Casinos24 September 2003
The new tax structure for Illinois' nine existing casino license holders went into effect July 1. The legislation calls for a tax on casino revenues that tops out at 70 percent and a $5.00 admission tax.
Casino owners and operators are outraged. A majority of the casinos in Illinois are publicly held companies which are accountable to stock holders. When the revenues of any publicly held company are negatively impacted, cutbacks and cost-cutting measures are sure to follow.
The Hollywood Casino in Aurora took its case to the public last week via direct mail and newspaper advertising announcing that starting July 1 it will be charging $5.00 admission to the casino, $5.00 for valet parking and $2.00 for self-parking, and a $1.00 charge for non-alcoholic beverages.
The property also announced it was laying off several hundred employees, cutting the hours of tables games and poker room operations, charging admission to the poker room, eliminating breakfast service in the Epic Buffet, and closing the Fairbanks Steakhouse two days a week.
Illinois' other casinos are sure to follow suit with programs of their own. As is the case with every industry facing a hostile business environment, the consumers end up the ultimate losers. But we're not dealing with a typical industry that provides goods or services.
It's easy to target casinos as "the bad guys". No politician ever got kicked out of office for voting to increase gaming taxes. It's a fact that during a decade of legalized casino gambling in Illinois, the license holders have reaped many millions of dollars in profits.
It's also a fact the casinos have been good neighbors and business partners. They have revitalized the river communities in Illinois, created tens of thousands of jobs, re-invested in renovations and improvements, enhanced Illinois as a travel and tourism destination, and contributed millions of dollars in taxes to state and local governments.
When the casinos start crying "poor mouth", however, it's not very easy to sympathize with them. Their profits may be reduced under the new legislation, but they're still going to be making money and lots of it.
There was a much friendlier tax environment for the Illinois casino industry when the riverboats first started sailing in 1992. But did that deter them from charging admission? Absolutely not! As a matter of fact, I recall paying $18.00 apiece for me and my wife for the "privilege" of gambling for a couple of hours during a weekend evening cruise. Admission charges were common at every Illinois property until the Grand Victoria Casino in Elgin opened with a free admission policy in October of 1994.
Remember the early years of Illinois casino gambling when you had to make reservations in advance to board a cruise? Remember when the waiting lines to board were a veritable "cattle call"? Remember when you were virtually "kicked out" of the casino when the cruise was over to make room for a new bunch of people with fresh money?
Illinois casinos had it made then. Now that the going is getting tough with increased competition and the fact that the novelty of casino gambling in the Chicago-area has worn off after 11 years, they are rebelling in ways that rub recreational casino gambling fans the wrong way.
Las Vegas is the model of gambling as entertainment. Not even the biggest, most opulent mega-resort there would even think of charging for parking, admission, or for beverages. Gaming fans could care less about the tax woes of casinos. They have their own tax and budget issues with which to deal.
This article is provided by the Frank Scoblete Network. Melissa A. Kaplan is the network's managing editor. If you would like to use this article on your website, please contact Casino City Press, the exclusive web syndication outlet for the Frank Scoblete Network. To contact Frank, please e-mail him at firstname.lastname@example.org.
Best of John G. Brokopp
John G. Brokopp
John G. Brokopp