Labor unions push for expanded gambling in final days of session

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Lawmakers still negotiating final details of ‘omnibus’ bill

By Peter Hancock

Capitol News Illinois

phancock@capitolnewsillinois.com

One of the state’s largest labor unions urged lawmakers to pass an expanded gambling bill in the waning days of the 2019 session, saying it would not only create new jobs in Illinois but would provide needed funding for a multi-billion-dollar capital improvements plan.

“Illinois is recovering from the trauma of four years of budget impasse, starving out vital services, and a public works stagnation,” Michael Carrigan, president of the Illinois AFL-CIO, said during a Statehouse news conference Tuesday. “An expansion of gaming will help fund much-needed infrastructure construction and be a shot in the arm for revenue for this state.”

The biggest obstacle to passing a gambling measure this year, however, is that with only three days left in the regular session, the bill still hasn’t been written.

“We have 80 hours to go. What are you worried about?” quipped Senator Terry Link, D-Indian Creek, one of the lead supporters of expanded gambling in the Senate. “The bill is being drafted. It’s not like this is all new concepts. We’re working off of bills we’ve done in the past. We’re tweaking. We’re changing them around a lot.”

Governor J.B. Pritzker has asked lawmakers to pass a bill legalizing sports betting in Illinois, something the U.S. Supreme Court ruled last year that states are entitled to do. He is also seeking an increase in the tax rate that Illinois levies on the profits that gaming companies earn from video gambling, raising the rate to 50 percent instead of 30 percent, on profits above $2.5 million a year.

Meanwhile, owners of the state’s 10 existing riverboat casinos are seeking a bill that would let them expand into additional markets, including land-based casinos.

Representative Robert Rita, D-Blue Island, said supporters of expanded gambling are working on a single omnibus bill that would contain all of those elements, but the details are still being worked out.

Another complicating issue in the whole gambling debate is a request from Midwest Gaming and Entertainment LLC, owner of Rivers Casino in Des Plaines, to insert what some people have called a “penalty box” provision into any bill legalizing sports betting.

Such a provision would bar any company that has been offering online sports betting platforms, which are currently illegal in Illinois, from obtaining a license to operate legal sports betting in the state for some period of time. Midwest Gaming is suggesting an 18-month “regulatory waiting period.”

A House committee held a hearing on that issue Tuesday during which a number of lawmakers questioned whether such a provision would be constitutional.

But Paul Gaynor, an attorney who lobbies for Midwest Gaming and Rivers Casino, said he was confident that it would be upheld. He said other states, notably Nevada, have similar laws with even longer sitting-out periods.

He also pointed to a 2015 Illinois attorney general’s opinion from then-Attorney General Lisa Madigan that said companies like FanDuel and DraftKings were violating Illinois’ criminal laws.

“States have broad police power to regulate all aspects of the gambling industry, including who is and is not qualified to apply for and receive a license,” Gaynor said. “In deciding whether an applicant should be licensed, it is common practice and common sense to consider the applicant’s propensity to obey the law voluntarily.”

Several people on the committee, however, said they were skeptical of the proposal. Despite the 2015 attorney general’s opinion, they said, no one in Illinois has been charged or convicted of a crime for operating illegal online sports wagering, and they questioned whether it would be lawful to punish an applicant for alleged criminal behavior if there has never been a criminal conviction.

Some also argued that Midwest Gaming and Rivers Casino were pushing the proposal so they could gain a larger share of the sports betting market by blocking out competition from FanDuel and DraftKings.

“I think there’s a conflict of interest here because it seems to be more self-serving, because you represent the client that would benefit from FanDuel and Draft-Kings not being able to enter the market,” said Representative Rita Mayfield, D-Waukegan. “You’re basically stifling competition.”

As of Tuesday evening, the committee had not yet come to an agreement on how to treat existing online sports betting operations.

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