Today, Illinois Governor Pat Quinn vetoed Senate Bill 1849, which passed the legislature during the Spring Session. In the Illinois House of Representatives, the bill passed with 69 members voting in favor, 47 voting against the bill, and two members voting present. The bill required 60 votes to pass, but will need 71 votes to override the veto from the Governor. The bill passed the Illinois Senate with the minimum 30 votes required for passage. 36 votes are required in the Senate to override a veto from the Governor.  

Senate Bill 1849 authorizes five new casinos in Chicago, Rockford, Danville, certain South Suburban townships, and Park City. The Chicago casino could have up to 4,000 gaming positions; the other facilities, including existing facilities, could have up to 1,600. There is, however, a “use it or lose it” provision in the bill. If a facility opts against increasing its positions, other facilities that have reached their maximum number of positions may then purchase the unused positions. This bill, unlike prior gambling expansion bills, does not permit slot machines at the Chicago airports or at the Illinois State Fairgrounds.  

Additionally, this bill permits horse racing facilities to apply for electronic gaming licenses. Racetracks in Cook County that conducted racing in 2010 may have up to 1,200 positions; racetracks outside of Cook County that conducted racing in 2010 are authorized for up to 900 positions; racetracks that did not conduct racing in 2010 may have up to 350 positions. There is a similar “use it or lose it” provision for the racetracks. Racetracks are limited to electronic gaming; the bill does not permit table games.  

Beyond the gaming expansion in the legislation, the bill also contains a number of other key provisions: it establishes a Chicago Casino Development Authority to oversee the Chicago casino and retain a casino operator, subject to the regulation of the Illinois Gaming Board; permits casino owners licensees to conduct land-based gambling with the approval of the IGB; requires licensees to establish diversity programs; bifurcates the privilege tax to establish different rates for table games and non-table games; provides a tax credit of up to $2 million for renovation or construction for licensees that conducted gambling operations prior to January 1, 2011; excludes certain comps from the calculation of Adjusted Gross Receipts; and provides up to $50 million to the Illinois Gaming Board for regulatory purposes.  

Finally, this bill does not contain an effective date. That means that the provisions of this bill would not become effective until January 1, 2013, if the legislature is able to muster the necessary votes to override the Governor’s veto.  

The General Assembly is scheduled to reconvene on November 27, 2012. Because this piece of legislation is a Senate bill, the Governor’s veto will be considered in the Senate first. The Senate will have 15 calendar days from when it reconvenes (it is possible that the Senate will convene earlier than November 27, 2012) to consider the veto. If the Senate overrides the veto, the House of Representatives will then have 15 calendar days to consider the veto. Both chambers must vote by a 3/5 majority to override the veto for the bill to become law, notwithstanding the Governor’s objection. If there is not an override vote in both chambers, the bill will die. If the bill dies, gaming expansion would require a new piece of legislation, either in the Fall Session (November 2012) or when the 98th General Assembly convenes in January 2013.  

In the upcoming months, both proponents and opponents of the gaming expansion will engage in a vigorous lobbying effort. As at least six votes are needed in the Senate and two votes are need in the House to override the veto, it could be difficult to override the veto on this specific piece of legislation. Alternatively, it is likely that the interested parties will renew efforts to reach a negotiated solution that considers the objections articulated in the Governor’s veto message. A new piece of gaming expansion legislation that includes a ban on campaign contributions from the gaming industry, strong regulatory oversight, and procurement rules would satisfy a number of the objections laid out today by Governor Quinn and could, after many years, facilitate passage of a gaming expansion in Illinois.