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COMPTROLLER'S CORNER
RIVERBOAT REVENUES
By Loleta A. Didrickson, Comptroller, State of Illinois
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June 30th marked the end of the Illinois' 1996 fiscal year and as we look back, we find that casino action
on river fronts throughout the state is still going strong,
but the industry is feeling the competition from bordering states. Adjusted gross receipts (total amount
less winnings paid back to bettors) for riverboat gambling in Illinois topped $1.215 billion, $117.5 million
or 10.7% higher than fiscal year 1995. This increase
pales in comparison to prior years due to the fact that
only one additional riverboat became operational in
fiscal year 1996 compared to multiple boats in prior
years.
Competition from the five Iowa riverboats on the
northwestern Illinois border has had a tremendous effect on the Silver Eagle in East Dubuque and the
Casino Rock Island.
The Silver Eagle instituted a temporary shutdown
of operations on December 4, 1995, with operations
resuming in a limited capacity on May 22, 1996. Silver
Eagle revenues had been declining severely due in
large part to the startup of the Diamond Jo riverboat
in Dubuque, Iowa in May of 1994. The Silver Eagle had
also been placed at a competitive disadvantage as the
hording and departure requirements as well as loss
limits for Iowa riverboats were legislatively eliminated.
In addition, free admission was offered on the
Diamond Jo.
Prior to the legislative changes in Iowa, monthly
adjusted gross receipts for the Casino Rock Island averaged about $3 million while the Silver Eagle averaged about $2.5 million. Adjusted gross receipts for
the casinos in November 1995, the last full month of
operation for both boats, were $1.257 million for Rock
Island and $826 thousand for the Silver Eagle. Since
November the Casino Rock Island level of adjusted
gross receipts has remained fairly steady averaging $1.325 million per month while the Silver Eagle in its
only full month of operation since resuming on a limited basis recorded adjusted gross receipts of $466
thousand in June. As a show of support from the community, the Casino Rock Island was actually exempted
from paying local and county taxes beginning in August of 1995.
With the startup of three riverboats in northern
Indiana this June, the Chicago area riverboats will face
border competition from the east. Joliet, which has
four riverboats, is in closest proximity to the Indiana
boats. In June the Joliet riverboats combined to record
adjusted gross receipts of 30.645 million, $1, 635 million or 5.3% less than in June 1995.
The Aurora riverboats had increased adjusted
gross receipts in June over the prior year of 3.4%.
However, this increase is far below the month over
month average increase of 17.7% for the entire fiscal
year 1996. In Elgin, the Grand Victoria Riverboat had
September 1996 / Illinois Municipal Review / Page 15
increased adjusted gross receipts of $2.81 million or
17.8% over the prior June.
Indiana also has a riverboat in Evansville at the
southern end of the state. This boat is in competition
with the Players Riverboat Casino in Metropolis on the
southeastern boarder of Illinois. Unlike Iowa, Indiana
riverboat gambling rules were established similar to
Illinois' allowing for a more competitive playing field
in the northeastern portion of the state. However, due
to the Federal Johnson Act, northern Indiana river-
boats (those in competition with the Chicago area) are
not allowed to cruise on Lake Michigan and remain
docked. Although boarding restrictions are applied
like Illinois, departure from the riverboats may occur
at any time.
In the southwestern part of Illinois, the Alton
Belle and East St. Louis' Casino Queen face competition from the St. Charles and Admiral riverboats in St.
Louis. Adjusted gross receipts for the Alton Belle declined in nine of the twelve months for fiscal year 1996
when compared to the prior year. For fiscal year 1996
receipts were 8.2% lower than fiscal year 1995. The
Casino Queen's adjusted gross receipts remained relatively flat in fiscal year 1996 when compared to fiscal
year 1995 with an increase of 0.1%.
Increased competition for the riverboat gambling
dollar from border states will undoubtedly continue to
have a big effect on Illinois, especially in areas where
Illinois faces competitive disadvantage. Many experts
feel that the midwest market is far from saturated, especially in the Chicago area where three Indiana river-boats have recently opened with two more to begin
operation in early 1997.
Page 16 / Illinois Municipal Review / September 1996