Gov. Pat Quinn vetoed legislation to expand Illinois gambling last month, but he also may have laid the framework for compromise in the fall veto session. Quinn dropped his objection to slot machines at horse racing tracks and set in motion a plan to link gaming revenue with replenishing the state education budget.

“The veto session looks to be promising in terms of reaching a grand bargain on gambling,” says Kent Redfield, a political science professor at the University of Illinois-Springfield. But there are also indications a deal could unravel, including that the bill author, State Rep. Lou Lang (D-Skokie), views Quinn as a dishonest broker.

Potential Deal on Horizon

Passed by the General Assembly in May, SB1849 would increase the number of state gambling positions – meaning a place to gamble such as one slot machine – from 12,000 to 32,000. It would add five casinos, including a publicly-owned Chicago casino, to the existing ten and additionally enable the installation of slot machines at six Illinois racetracks.

The argument for such a major expansion is that it would create jobs and revenue.

The Illinois Job and Revenue Alliance, a coalition of business and labor groups, commissioned a study in April which found that SB1849 would create 20,451 jobs and $195 million in annual state revenue.

But academics that study Illinois gaming such as William Thompson, a professor of public administration at the University of Nevada Las Vegas, question these findings. They contend money spent on gambling is mostly cash not spent in other parts of the economy. Also, lawmakers that already have casinos in their district, like State Rep. Keith Farnham (D-Elgin), oppose the bill. These legislators fear that there is not enough demand to make both new and existing casinos profitable.

Quinn, though, appears to accept the general premise that gambling expansion is economically beneficial, viewing SB1849 more as poorly executed than fundamentally flawed. “We have one opportunity to get it right,” read the gubernatorial veto statement. “If we do, we can create jobs and foster economic development in areas that need it across Illinois.”

In the veto statement, Quinn faulted “the absence of strict ethical standards” in the bill, including the lack of a ban on campaign contributions from owners of casinos and racetracks. Also, Quinn said SB1849 failed to provide the Illinois Gaming Board with enough clear authority over the Chicago casino. The governor raised the specter of growing mafia influence in the event that ethical standards were not addressed.

But Quinn has raised these worries before, and gaming supporters, including Lang and State Sen. Terry Link (D-Waukegan), the senate bill sponsor, say they are willing to include the ethical provisions.

Concerns from Quinn besides ethics do not equate to major changes in the bill. The governor makes the obvious point that no expansion of gambling can solve the state fiscal crisis and an $83 billion unfunded pension liability – claims that not even the most ardent gambling supporter assert. But, crucially, the governor keys in on a way gambling expansion can help the state budget – education.

“The budget for pre-school to 12th grade education was reduced by $210 million by the General Assembly this fiscal year and faces more challenges in the immediate future,” Quinn states. “Any expansion of gaming must prioritize the needs of our students.”

If numbers from the Illinois Jobs and Revenue Alliance are correct, the $210 million can be mostly made up by the $195 in projected annual gaming revenue. Indeed, using gambling for education money might be where Quinn and supporters converge. In a statement expressing support for SB1849, Chicago Mayor Rahm Emanuel said that money from a city casino “would be used to rehabilitate neighborhood schools.”

Perhaps most notable about the veto statement was that it did not include opposition to slot machines in racetracks. Many Springfield observers – including Lang – viewed Quinn’s opposition to racetrack slot machines as the reason a deal fell apart during last year’s fall veto session.

Glen Berman, executive director of the Illinois Thoroughbred Horseman’s Association, has lobbied for slot machines at racetracks, as horsemen will be provided a cut of any revenue. Berman says that his organization is “very happy and grateful” for Quinn dropping his opposition. Beman is optimistic that Quinn and lawmakers will reach a deal in the two-week fall veto session, which is scheduled to start November 27.

Senate President John Cullerton (D-Chicago), who voted for SB1849, also sees a potential deal on the horizon. “The Senate President is optimistic that we are pretty close to a compromise,” says Cullerton spokesman Ron Holmes. According to Holmes, it will be easier for the General Assembly to work with Quinn than try a veto override, which requires 60 percent support from both the House and Senate.

Creation Of Ethical Standards An Obstacle

A notable voice of pessimism among SB1849 supporters is Lang. According to Lang, the only way to make SB1849 law is a veto override. This is difficult since the bill got 30 votes in the Senate and it would need 37 ‘yeas’ for the override.

Lang accuses Quinn of being “disingenuous with the legislature and disingenuous with the public” in stating his ethical concerns. “I have sat five feet away from the governor and said ‘I will give you any language you want on ethics just give it to me,’” Lang says. But Lang says Quinn ignored him.  A spokesman for Senate sponsor Link also described working with Quinn as “monumentally frustrating.”

There are essentially two substantive concerns raised by Lang.

One is that Quinn is grandstanding and will veto any gambling legislation. But in defense of the governor, Quinn released a gambling framework last October that spelled out his ethical concerns, including the campaign contribution ban. In other words, the governor has given Lang general language on ethics.

But that gets to the second concern – which is that Quinn is too broad with these ethical gripes. Lang and Quinn are locked in a semantic debate about whether SB1849 gives the Illinois Gaming Board full regulatory authority over the Chicago casino. And what is meant by campaign contribution bans is also a problem.

Quinn did not get direct contributions from casino or racetrack operators in his 2010 campaign for governor. But as Capitol Fax reports, he did get contributions from the immediate family members of casino operators, raising questions about who is included under the ban. Also, the current campaign finance climate is unfavorable to such a ban. Casino operators could funnel money into Super Political Action Committees or 501(c)(4) or social welfare nonprofits.

So questions remain about whether a gambling deal can be worked out.

Sometimes in these legislative thickets, Speaker of the House Mike Madigan (D-Chicago) emerges to strike the grand bargain. But Madigan has recused himself entirely from this consequential statehouse issue. Madigan spokesman Steve Brown refused to say why, though the Daily Herald reported last October that Madigan’s private law firms represents owners of the new Rivers Casino in Des Plaines.