MY PAYING ADS

Sunday, April 27, 2008

Elgin's chips are down

This article includes a comments area. But me believes you gotta log in to comment on there (be registered in otha words)

It's sad these IL cities ain't getting casino money to help fund for projects. The smoking ban is more of a culprit than bad weather. Bad weather didn't prevent people from smoking and gambling in the past!

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Elgin's chips are down

Boat revenue sinks; with it, city projects

April 27, 2008

ELGIN -- Its profits have served as the economic engine behind a revitalized downtown, as well as the funding source for many of the city's infrastructure improvements.

And while factors ranging from bad weather to a smoking ban have been blamed for pushing down the Grand Victoria Casino's revenues in 2008, city officials remain confident that will not significantly impact the more than 100 projects and programs budgeted for casino funding this year.

The city had expected to receive $28.4 million in riverboat proceeds this year. But reports indicate gross revenues have been down by roughly 17 percent so far compared to 2007. There also has been a recorded 9 percent drop in attendance.

Elgin receives $1 for every person admitted into the casino, which accounted for $2.5 million in revenue last year.

The city also collects 5 percent of the riverboat's gross receipts. Elgin got about $21.8 million of the riverboat's roughly $436 million in gross revenues in 2007.

If the revenue decline continues, the city could lose as much as $4 million in projected funds by year's end.

City Manager Olufemi Folarin said after reviewing the findings of a January financial report by the Illinois Gaming Board, city staff started compiling a list of projects to recommend to the Elgin City Council for elimination.

Money collected from the casino goes into the city's Riverboat Fund, which has been slated to pay for about 75 one-time, capital improvement projects in 2008.

Funding from the casino also has been allocated to assist 23 area groups, including the Children's Theatre of Elgin, Public Action to Deliver Shelter and the United Way of Elgin.

No operational impact

Folarin would not comment on which of the 109 projects budgeted with Grand Victoria funding that were recommended to be cut, saying it would be unfortunate if circumstances brought about the elimination of even one.

"To us, that's bad -- because once you put a project on your books and you're going to do it you really want to do it," he said. "But to other communities that's a luxury, because they don't have anywhere to turn."

Folarin said overall, the city's financial picture looks better than that of a number of neighboring municipalities. He credited an adherence to a conservative fiscal policy and a large economic base for making Elgin self-sufficient, which averted reliance on the riverboat to help pay for vital operational expenses such as police officers and firefighters.

"Most of the projects are projects we put on the books because we think it's in the best interest of the community to have it," he said. "But if we don't have the means to do it because the riverboat money went down, then so be it."

City Fiscal Services Group Director James Nowicki said the issue over what project to cut has already been settled, at least for now.

Plans to construct a controversial traffic roundabout at the intersection of Dundee Avenue and Summit Street have been postponed until next year due to unresolved issues over its engineering. Council members gave preliminary approval for the project last month. Nowicki said with that project now off this year's budget, the city will save an estimated $4 million.

"It was fortuitous for us to be able postpone that project and then have those additional funds used as the offset," he said.

Others hurting, too

Gambling revenues are down this year at riverboat casinos statewide. The Illinois Gaming Board has reported an average loss per month of nearly 20 percent among the state's nine riverboats.

Many factors have been attributed to the decline, including a slowing economy, an unusually bad winter and a statewide smoking ban that went into effect Jan. 1.

"We think the biggest impact has been the smoking ban," said Tom Swoik, executive director of the Illinois Casino Gaming Association, a non-profit advocacy group representing riverboat casino operations.

Swoik said revenue losses for riverboat casinos in northern Illinois have consistently been higher than that of their counterparts in Indiana, where there is no smoking ban.

"They (Indiana) have the same weather and the same economy that we have, so it's got to be the smoking ban," he said. ""When you compare Illinois to Indiana, they're picking up more of the market share every month and we're losing market share."

But according to Illinois Gaming Board spokesman Gene O'Shea, the smoking ban is but one factor of many.

The extent of the ban's effect on profits can't be determined, O'Shea said.

"The markets are down in Las Vegas, Atlantic City, Indiana, Iowa and Missouri as well," he said. "The industry is being affected across the country.

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