Rolling the dice

Rolling the dice

Posted by JP on Sat, 05/31/2008 - 00:39
In order to fund an ever-growing construction spending plan – now up to nearly $34 billion from $31 billion – the Illinois Senate is likely to approve three new casinos. One would be a land-based casino in Chicago. One would be a land-based casino elsewhere in the state. The third would be a riverboat casino that couldn’t be closer than 15 miles from an existing casino. The existing casinos would also be allowed to add more slot machines and there’d be slot machines at Arlington Park and other tracks. So that would bring the total number of casino licenses to 13. Nine are currently being used and the 10th has been in limbo for years. “I wanted 15,” said Senate President Emil Jones Jr., a Chicago Democrat, as he hurriedly left the governor’s office late Friday. Asked by a Chicago Tribune reporter where he thought the extra casinos should go, Jones said, “It’s going in the Tribune Tower.” Laughter ensued. Late Friday, an Illinois Senate committee signed off on the idea of leasing out the lottery for a generation to get cash now. So here’s the deal. The state would lease out its rights to upward of 80 percent of the state lottery proceeds for nearly 65 years in exchange for at least $10 billion upfront, with $3 billion set aside for education and $7 billion for construction projects. So, how much does the lottery bring in annually? The answer: $600 million. It’s late (or early), but I’m pretty sure the math works out like this. $10 billion is a lot of money. But whoever ends up with the lottery, will likely make at least three times that much over the course of this deal. 80 percent of $600 million is $480 million. Multiply that by the possible length of the lease (65 years) and you get $31.2 billion. So the state’s giving up $31.2 billion for $10 billion now.
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