Short of cash, Illinois eyes more gaming for Chicago, suburbs

May 29, 2007 4:50 AM

Chicago Mayor Richard Daley may get his casino after all.

He’s been telling state politicians for months (years?) that they should bank revenues that gambling in the Chicago area would develop.

And, they appear to be listening.

Faced with a serious budgetary shortfall, lawmakers in Springfield, Ill., have been searching for a way to meet their financial commitments without much success. So, a group of Senate Democrats have proposed tapping the "golden goose" of gaming.

Over the weekend, Senate President Emil Jones proposed authorizing one casino in Chicago and three in the city’s suburbs. Also, he proposed doubling the size of all existing casinos with a goal of raising $2.3 billion in the first year of operation and $1.4 billion in the following years.

There were a number of other tax generating proposals to help meet the $5 billion shortfall.

Included in Jones’ plan was the creation of a "alternative minimum" tax for companies that are now able to avoid paying any state taxes and to impose an income tax on some types of business that are currently exempt.

He explained that he was "not interested in taxing working families."

Although his own suggestion of a "gross receipts" tax was absent from the proposal, Gov. Rod Blagojevich offered qualified support for the plan.

"If it means health care for everybody, I’m willing to accept the proposal that would provide more gaming," Blagojevich was quoted as saying.

Opposition to increased gambling came almost immediately from the Republican leadership that argued the plan provided too much money for general state spending but not enough for school and road construction projects "that are long overdue."

And in Massachusetts

Without the vetoing pen of ex-Gov. Mitt Romney to deal with, some officials in Massachusetts are again suggesting the state open the door to casino gambling.

Last week, State Treasurer Tim Cahill proposed the state enlist private developers to build one or more resort casinos before an Indian tribe "gobbles up" what could be hundreds of millions of dollars in new revenue for the Bay State.

Cahill pointed to the millions of dollars being spent by Massachusetts residents at Indian casinos in Connecticut and at a slots emporium in Rhode Island.

"The Mashpee Wampanoag issue has changed the dynamic. They’re going to be allowed to do this somewhere, somehow and someday, so I think we need to get out in front of it," Cahill said.

House Speaker Salvatore DiMasi, an avowed casino opponent who has the political power to quash any proposed legislation, lambasted the plan.

Macau moaning

For months, investors have watched gaming companies with Macau ties attract money like flies to a summer picnic.

Companies like Las Vegas Sands Corp. (LVS) and Wynn Resorts Ltd. (WYNN), with operating casinos in Macau, were considered the investment of the future since the former Portuguese enclave appeared destined to be the gambling mecca of the world.

Macau contributed to that presumption by announcing ever-increasing gaming revenues as Chinese gamblers poured into the tiny community, mostly for day-trip gambling junkets.

But a cloud developed on Friday when it was announced that the nearest Chinese province, Guangdong, had begun restricting travel to Macau. The provincial government said it was starting to enforce strict visa application reviews, tighter limits on the amount of times residents can travel to Macau and in some cases restricting permits altogether.

Fear immediately struck gaming investors and the share price of both the Macau operators fell substantially, although analysts were quick to point out that the province officials were likely to ease travel restrictions while working with the Beijing government.

At the close of trading on Friday, LVS was dropped to $76.58 a share while WYNN traded at $94.75 a share.

Score: 2-2

Dealers at the Atlantic City Hilton Casino evened the score last week by rejecting a bid to unionize.

The United Auto Workers had announced plans to unionize dealers at all 11 Atlantic City casinos.

In their initial efforts, they were successful in getting favorable votes from the dealers at Caesars Atlantic City and at the Trump Plaza Hotel and Casino. However, they lost the vote at the Trump Marina Hotel/Casino.

At the Atlantic City Hilton Casino, dealers voted 316 to 268 against unionization.

This Thursday (June 2) the dealers at Bally’s Atlantic City will cast their ballots on the union question.

THE INSIDER: The Meadows Racetrack and Casino in Pennsylvania, owned by Las Vegas gaming executives Bill Paulos and Bill Wortman, will open two days this week so that regulators can monitor the operation.

Gaming Partners International Corp. (GPIC) says it has delivered 70,000 high frequency RFID plaques to the Crown Macau Casino. The plaques are used as chips in high-end table games.

An Indian tribe in Michigan has done away with dealers in its new virtual casino. The Soaring Eagle Casino & Resort has opened a virtual casino in Mount Pleasant with customers facing off against virtual dealers rather than live bodies.

Analysts at Jefferies & Co. have initiated coverage of Progressive Gaming International Corp. (PGIC) with a "buy" rating.

Isle of Capri Casinos Inc. (ISLE) announced its board of directors has appointed Lee S. Wielansky as a director. And in Missouri, the company has been approved by the state gaming commission to manage Casino Aztar in Caruthersville.

Boyd Gaming Corporation (BYD) says it has signed a joint venture agreement with General Growth Properties Inc. (GGP) for its retail development at its Echelon project.

Also, Boyd Gaming has contracted with a firm in Florida to provide surveying and planning services for the new Dania Jai Alai Casino in Dania Beach.

Bear Stearns gaming analysts have upgraded the shares of Shuffle Master Inc. (SHFL) from "under perform" to "peer perform."

Ameristar Casinos Inc. (ASCA) has declared a quarterly cash dividend of $0.1025 to be paid on June 15 to stockholders of record as of June 1.

Bally Technologies Inc. (BYI) has announced the retirement of Stephen Rice from its board of directors.

Louisiana casinos reported gaming revenues of $205 million during the month of April, down from the $213.9 million reported in April, 2006.

Work has begun on a proposed casino near the historic Bethlehem Steel plant in Pennsylvania, a project that has been approved for Las Vegas Sands Corp. (LVS).