Illinois losing gamblers to cheaper Indiana casinos

CHICAGO -- Illinois casinos already were losing gamblers to Indiana when new state taxes went into effect last month.

Now gamblers say the added costs are giving them an extra push across the Indiana state line.

Charles Jackson has gambled at Harrah's in Joliet, Ill., for nearly 10 years, but no longer, he told the Chicago Tribune for its Sunday editions.

"Monday was my last day," Jackson said Wednesday as he and his wife, Jacqueline, placed bets at a roulette table in Gary, Ind.

Monday was when the Joliet casino began collecting a $5 general admission fee to offset the new state taxes that take as much as 70 percent of a casino's receipts.

Argosy Gaming Co. plans similar measures at its Empress Casino in Joliet. So does Penn National Gaming Inc. at the Hollywood Casino in Aurora.

"We simply cannot continue to eat enormous tax levies without passing something on to consumers," Argosy spokesman Jim Wise said.

In the fiscal year ending June 30, patronage at four Illinois casinos -- one each in Elgin and Aurora and two in Joliet -- shrank 5.7 percent to 10.5 million visitors while five casinos in northwest Indiana attracted 16.2 percent more people, or 12.9 million visitors.

The four Illinois casinos finished the fiscal year with 52.4 percent of the $2.32 billion market, down from 55.6 the previous year, the Tribune reported, citing the Illinois Gaming Board.

Indiana got a boost a year ago when the state allowed dockside gambling so casino boats no longer had to cruise and make gamblers wait to board at specific times. Illinois removed that restriction in 1999.

Then last month new Illinois taxes took hold, giving the state 15 percent on a casino's first $25 million and more on higher takes, up to 70 percent on revenues above $250 million.

Las Vegas-based Harrah's Entertainment Inc. reported operating margins for its Illinois and Indiana casinos dropped to 11.7 percent in the second quarter compared to 20.6 percent in the same quarter of the previous year.

"It fell nearly 45 percent, mostly due to the increase in taxes," said Brian Lund, an equity analyst with Morningstar Inc.

"It's down to the point where it's tough to run a profitable business," Lund said.

Illinois Gov. Rod Blagojevich supported the taxes to help deal with a budget deficit. He hasn't wavered.

"The big picture for us is that the casino industry is and will continue to be very, very profitable," spokeswoman Abby Ottenhoff said.