Politics

(CBS) House Speaker Michael Madigan showed his hand in gambling negotiations Monday, proposing a major expansion that would raise $1 billion a year through three additional casinos and thousands of slot machines at riverboats and horse tracks.

State officials face growing pressure to come up with a massive deal by year's end on a statewide construction program and aid for Chicago-area mass transit systems. The construction would be funded by money from gambling expansion.

Should the plan pass, Chicago would become the first American city to own a casino. With 4,000 positions it would be comparable to Las Vegas venues. Mayor Richard M. Daley is reportedly considering the old main post office over the Eisenhower Expressway, Lakeside Hall at McCormick Place and South Michigan Avenue's long-troubled Congress Hotel as potential sites. Officials don't want to wait until the new casino's ready for the cash to flow.

"Small casinos could be opened up in numerous locations," said Jim Wagner of the Chicago Crime Commission. "They didn't say where or how many."

In the suburbs, four existing riverboats would each get hundreds of new gambling positions. Two more boats would go to sites chosen by the Illinois Gaming Board. Four suburban horse tracks would each get hundreds of slot machines each.

An estimated $1 billion in new state government revenue is the payoff for flip-flops by legislative leaders and a governor who long claimed to oppose gambling expansion.

"In the spirit of compromise, I've accepted gaming, that I'm not for and don't want," said Gov. Rod Blagojevich.

Unlike a general tax increase, most of this new money comes from just 10 percent of Illinois residents. That small group loses about $1.6 billion of the total $2 billion lost at casinos here each year.

Wagner is demanding a voter referendum on gambling expansion.

"Individuals within the city of Chicago should be allowed to have a voice," Wagner said.

A referendum in Arlington Heights was approved by a mere 26 votes to allow slot machines at Arlington Park. But that was back in the 1990s. The mayor resents not being consulted by state officials who want to put 1,100 slots in at the park now.

"We do not appreciate or welcome the pre-emption of home rule," said Arlington Heights Mayor Arlene Mulder. "[It] could bring more local addiction to gambling. It can ruin lives."

Gamblers now lose $2 billion a year at Illinois casinos. Losses could jump to close to $5 billion a year with this expansion. The government plans to skim a huge chunk of that loss for new roads, bridges, schools and mass transit.

A University of Illinois economist estimated those ruined lives cost society $3 for each $1 of new revenue from casinos. Because the Chicago area will bear almost all that burden, downstate is an especially big winner in this deal. Without having to put any skin in the game, the will get an equal share of new gambling dollars to spend on roads, bridges, schools and mass transit.

Many downstate lawmakers refuse to support aid for Chicago transit unless it is accompanied by new construction projects across Illinois. That, in turn, requires a deal on the notoriously complex issue of gambling.

Pleased that the City of Chicago could soon become the first government entity in America to own a big, land-based casino, Daley on Monday became a cheer leader for a vast expansion of gambling here.

"Gaming, they're going to expand it quite heavily, both sites, race tracks and all that," Daley said. "But they have to use the money in a way to really help the citizens."

Two top House Democrats who introduced Madigan's plan at a Chicago news conference argued it was the catalyst for a resolution.

"This is the linchpin that's going to drive everything," said Rep. Bob Molaro, D-Chicago. "This is the real deal."

The House will meet next Monday to consider the proposal, Madigan said in a letter to lawmakers.

The new proposal includes many of the elements that already passed the Senate in September, including a huge, land-based casino in Chicago and thousands more slot machines at Illinois' nine existing riverboats.

Madigan's plan also calls for another new riverboat casino and reissuing Illinois' 10th casino license, which has been tied up in legal limbo since it was approved for the Chicago suburb of Rosemont in 1999. The Senate-backed plan called for creating two new licenses.

The speaker also wants 3,600 gambling positions at the state's five horse racing tracks, something the Senate idea did not include.

Both the Senate and the Madigan proposals call for a 70-30 split of new gambling money between construction and education, but Cross said there is no agreement yet on how to divide up the education portion.

Other possible roadblocks include how many hundreds of millions of dollars to charge the city of Chicago for the right to own a mega-casino, how to divide up ownership for minorities and women in the new casino licenses and how to restructure the Illinois Gaming Board that regulates casinos.

Jones, D-Chicago, said he still needed to see the fine print of Madigan's plan.

"You can put one thing on paper but it's what the words actually say," Jones said. "One word can change the whole concept."

Madigan didn't attend Monday's meeting, saying he wasn't officially invited. But spokesman Steve Brown said Madigan's regular meetings recently with Cross and Senate Republican Leader Frank Watson have been "much more productive," allowing the Republicans to discuss details with Jones and Blagojevich later.

The Democratic governor wasn't present but took part in the meeting by phone. His office would not say where the governor was.

The House hopes to vote on the gambling expansion plan and mass transit aid early next week, but a construction projects bill may not be ready then, Brown said.

The governor's office hadn't seen details of the proposal and would need to compare them with what leaders had discussed in recent weeks, said Blagojevich spokeswoman Rebecca Rausch.

"What we need to do is develop a plan to pass in both chambers," Rausch said.


CBS 2 Political Editor Mike Flannery and Political Producer Ed Marshall in Chicago, and the Associated Press in Springfield, contributed to this report.

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