Some businessmen have spent fortunes to float casino boats on rivers that flow through and around Illinois, so it`s understandable that recent events seem to them like scenes from a sci-fi adventure movie.
Instead of simply soaking up profits as they ply the waters in their paddlewheelers or modern catamarans, they find they must fight off attacks by well-financed Indian tribes that are building land-based casinos that will draw off potential customers.
And just over the political horizon, the multicasino complex proposed for Chicago looms like Darth Vader`s deathstar, fixing to blast them out of the water.
Competition among the increasing number of boats, meanwhile, already has claimed casualties and forced survivors to lower admission prices to maintain market share.
As if all this isn`t trouble enough, some community leaders, even in towns that are benefiting from a flood of gambling tax revenues, are voicing doubts that the price of hosting the boats is worth the benefit. The focus on gaming, they fear, may be diverting energy from efforts to build their tax bases in more traditional ways.
With gaming, ”you`re just moving somebody`s money around” instead of producing new assets, said Rebekah Bourland, senior vice president of the Peoria Area Chamber of Commerce.
Since the Par-A-Dice Riverboat Casino began operating in Peoria in December, it has generated $6.6 million in tax revenues for the state and $2.6 million to be shared by Peoria and East Peoria.
Under the 1990 state law that legalized riverboat gambling, the state imposes a 20 percent tax on casinos` gaming revenues. Twenty five cents of every dollar in tax is rebated to the host municipality.
Bourland, while welcoming the boat as a ”tremendous asset” to the community, warns of a danger.
”As a state and a nation, we`re getting to the point where the first thing that comes to mind as a way of raising revenue is some kind of gaming,” she said. ”That`s a non-productive activity. We need to get back into producing goods as a means of economic growth.”
”What happens when people get tired of gambling?” she said.
Such considerations aside, the scent of gaming profits on the water has aroused the senses of Las Vegas types such as Harrah`s Casino Hotels and Sahara Resorts and Players International Inc., widening the conflict among entrepreneurs vying for the remaining four slots still available in Illinois under the enabling legislation.
The battle is intense.
Last week the Illinois Gaming Board put off a decision on whether to revoke the ”preliminary finding of suitability” of a firm headed by John Q. Hammons, a Springfield, Mo., hotel magnate who had promised to make substantial investments in a hotel and office buildings if he is allowed to put a boat in downtown Joliet.
Gaming Board member Michael Zaransky, president of Airways Rent-A-Car and one of two new board members appointed by Gov. James Edgar, had moved to disqualify Hammons after Hammons` promises of heavy investment evaporated, and giant Harrah`s appeared as the real muscle behind the application.
Meanwhile, Jim Jumer, veteran operator of a Midwestern chain of castle-like hotels, has established a riverboat at Rock Island and is trying to nudge into a second slot at nearby Moline, in the process shoving ahead of Las Vegas-based Sahara Resorts.
Sahara has proposed a $50 million land-based dinner theater, nightclub and restaurant complex to go along with its boat.
Another boat is scheduled to open in downstate Metropolis on the Ohio River, and the gaming board is considering applications for Aurora and Elgin. Meanwhile, Native Americans, taking advantage of a 1988 federal law, have established about two dozen Las Vegas-style casinos in the U.S., mostly in Minnesota and Wisconsin, according to the National Indian Gaming Commission. In May the St. Croix Chippewa tribe opened an $11 million casino northwest of Minneapolis, and it announced that it wants to build a more elaborate casino in the Chicago area, their first choice being in Rolling Meadows.
But all the operators and candidates look warily at Chicago. There the political jockeying has begun to allow three casino heavyweights-Caesars World, Hilton Hotels Corp. and Circus Circus Inc.-to get Illinois law changed to permit construction of a casino-entertainmen t complex. The proposed $2 billion extravaganza would dwarf the combined investment in all the boats now plying Illinois waters.
In addition to asking for permission for land-based casino gaming, the three giants are also asking that the money they take in from gamblers be taxed at less than the 20 percent imposed on the riverboats, and they have balked at having to charge an admission fee as the riverboats must.
Despite a public relations and lobbying onslaught by the companies, the boat owners are optimistic that the big Chicago competitor won`t materialize. ”That`s far from a done deal,” said William J. Sabo, president of Joliet`s Empress River Casino Corp. He relaxed his 6-foot-plus frame behind a desk in his office overlooking the wooded 55-acre site of the boat`s pavilion, floating dock and parking facilities. It all cost $32 million.
Sabo, who worked in finance for 25 years, gave up his job as chief executive of First National Bank of Lockport.
”The interests of the river towns are still to be heard,” said Sabo.
”They`ve developed parking, built sea walls, dug basins. Those communities have an interest in having a chance to flourish after the cities` and the companies` indebtedness is paid off. We made our judgments based on existing law. All except Alton have been in operation less than a year. The governor senses there`s an issue of the state`s integrity. His position has been firm. There`ll be an impact on the racing business and the river towns. To feel that the mayor`s (Daley) interests are going to be served is myopic.”
He acknowledges, though, that the forces in favor of the casino are powerful.
”If people are given the option of gambling in Chicago, we may be able to feel confident that we can be competitive in the market. That`s something we as business people will have to face. We are certainly not happy about it.”
Neither is Ruth Fitzgerald, president and chief executive of the Will County Chamber of Commerce and of the Joliet/Will County Center for Economic Development.
She is also chairman of the Rivertowns Coalition, which was formed to combat the Chicago casino proposal.
Before the state allows land-based casinos, says Fitzgerald, it should give the riverboats a chance to fulfill their reason for being.
”The (riverboat) legislation was written for river towns that were depressed and that needed the jobs,” she said. ”And when you look at the unemployment in the towns like Aurora and Joliet, you will find that it`s higher than Chicago`s. (Chicago`s unemployment rate in June was 8.6 percent, compared with Aurora`s 9 percent and Joliet`s 9.5 percent.)
”The legislation is doing exactly what it was intended to do, and that is to put a positive spin on the river towns that have been so hurt over the last decade economically.”
The Joliet boat, said Fitzgerald, ”has exceeded all expectations. When you look at a blackjack dealer averaging $18 an hour (in income), and over 850 people on every cruise, that`s pretty impactful. It`s bringing a lot of people to town who have not been here before. The restaurants and the hotels and the service industries all benefit.”
Ted Priovolos, who owns Al`s Steak House in Joliet, agrees.
”Since the boat opened, there`s a big difference,” he said. ”We`re getting the Chicago, the north Indiana market, the people who would never think of coming to Joliet.”
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Monday: Riverboat gaming can be a gamble for communities.
