Let’s say you’ve got a rich uncle. Someday, you figure, he will die and leave you his money and you will retire in comfort.
But you dare not assume that, right? Your uncle could live to be 105. Or he might not be so rich after all. Or he could leave it all to charity.
Better to max out your 401k all the same, playing it safe.
Chicago’s rich uncle is a casino. The huge money it would bring, its more fervent supports say, would go a long way toward solving the city’s financial problems. All will be good.
But we can’t help wonder. The politics of getting state approval for a Chicago casino are complicated. For 20 years, one bill after another in Springfield has gone down to defeat.
And what kind of revenue might Chicago count on, especially given the likelihood that new casinos also would be approved for the suburbs and Downstate? A casino once was a sure moneymaker. But as Chris Fusco of the Sun-Times reports in Monday’s paper, the local competition for gambling dollars is more intense than ever. The market may be — we keep hearing this word — saturated.
Uncle Casino may come around yet, and we’ll be waiting. But Mayor Rahm Emanuel and the City Council have no choice but to tackle Chicago’s financial crisis in the more tried-and-true way, by cutting operating expenses, restructuring pensions as permitted by the courts, and raising new revenue from more traditional sources, most likely a property tax hike. Let’s hope the mayor can avoid that, but the odds are not in his favor.
By state law, Chicago is required to pay $839 million into its police and firefighter pension funds next year, $550 million more than this year. The city’s 2016 budget is short $300 million. And the city must come up with at least $50 million more for the city’s two other pension systems.
Add to that a crushing $700 million pension payment due next year from the Chicago Public Schools.
In what might be the best-case scenario, a city-owned Chicago casino would bring in $457 million a year, according to the state Legislature’s Commission on Government Forecasting and Accountability. Of that gross, more than $200 million would go to the state in taxes, and management fees would eat up, conservatively, another $150 million. That would leave the city with about $107 million.
Even if Emanuel were to succeed in getting the state to agree to a smaller tax bite, the haul from a casino would not spare the mayor and City Council from having to take hard steps to right the city’s finances.
As Fusco reported, projections of revenue from new casinos may be squishier than ever because of the proliferation of video gambling machines, which became legal in Illinois in 2012. Folks who once gambled at casinos now play the slots at their corner tavern or VFW hall.
We have long favored a Chicago casino, whether owned by the city, state or a private consortium, with rigorous safeguards against the influence of organized crime. We suspect a Chicago casino would compete well against existing casinos in the metro area — and against any new ones. No offense to anybody in Indiana, but would a conventioneer rather play blackjack in the shadow of the old steel mills or close to Chicago’s glorious lakefront and some of the best restaurants in the world?
But a casino is only a partial solution, at best, to Chicago’s financial woes. With the municipal elections over, there can be no more delaying the inevitable hard measures. Chicago’s credit rating already is dangerously low.