Illinois casino revenue goes up in smoke

Aug 15, 2009 8:34 PM
Staff & Wire Reports | Casino operators in Illinois report they’ve lost "lots of money" in the wake of a statewide smoking ban, according to economists at the Federal Reserve Bank of St. Louis.

Bankers say state and local governments lost $200 million in taxes last year because of the ban.

That’s more than a projected $150 million that state legislators hope to realize by privatizing lottery management and selling tickets online, and more than half of the $300 million in revenue the state projects could be raised by legalizing and taxing video poker.

Economists who studied casinos in Illinois and surrounding states found that attendance went down by 9 percent while revenue plummeted by more than 20 percent, according to study results published last month in The Regional Economist, a federal reserve bank publication.

"Those that did go gambled less when they were there," Thomas Garrett, a co-author of the paper, told the State Journal-Register newspaper.

Revenue continued to slide in early 2009, when income dropped more than 9 percent at Illinois casinos during the first quarter, according to the American Gaming Association.

Casinos hit hardest were near state borders where gamblers had nearby smoking-allowed options. While Indiana, Iowa and Missouri casinos all saw revenue rise last year, no Illinois casino had an increase in revenue, study authors found.