New Casino Is ‘Cannibalizing’ Business At Other Facilities, Official Says

JOLIET, Ill. (CBS) — New figures seem to support the argument that new casinos cannibalize the profits of existing ones.

As WBBM Newsradio’s Regine Schlesinger reports, until recently, the Grand Victoria Casino in Elgin was the state’s biggest moneymaker.

LISTEN: WBBM Newsradio’s Regine Schlesinger reports

But since Rivers Casino opened not far away in Des Plaines, revenues at the Grand Victoria were down 24 percent in August, to $18.5 million.

Two casinos in Joliet – Harrah’s and Hollywood Casino – have also lost revenues since Rivers opened.

Harrah’s Joliet generated $17 million, down from $20.2 million in August 2010 and $18.9 million in July. Hollywood Casino Joliet generated $11.2 million, down from $12.2 million in August 2010 and $13 million in July.

Rivers Casino generated $34 million worth of gambling business in August. The casino opened in late July.

The impact of the losses at Harrah’s and Hollywood Casino on city revenues for Joliet in August was worse than the city projected. But so far this year, city casino taxes have exceeded expectations as budget makers braced for the combined impact of a weak economy and more competition in the marketplace.

“For the month, we were about $135,000 short (of projections),” said Kenneth Mihelich, the city’s budget director. “For the year, we’re still about $500,000 to the good.”

Mihelich said he was “cautiously optimistic” that the city would end the year with more casino tax dollars than predicted in its budget.

Joliet officials, however, also are worried about pending legislation that would add new casinos within the Chicago city limits and in Lake County, the southern suburbs, Rockford and Danville, while also adding slot machines at horse racetracks and O’Hare and Midway international airports.

“I think what the numbers are showing is that the new business merely cannibalizes the existing market and just shifts dollars from one casino in the state to another,” Thanas said.

A parliamentary maneuver has kept the gambling expansion legislation from reaching Gov. Pat Quinn’s desk, despite approval by the Illinois General Assembly. Although he has yet to say outright if he would veto the legislation or amend it, the governor has called it “top-heavy” and indicated it needs a re-write.

The Joliet Herald-News contributed to this report, via the Sun-Times Media Wire.

  • Kevin Fredriksen

    And when a new Binny’s moves into town it stifles the sales of the mom and pop shops, and when another bar emerges in a land that is full of bars, someone’s gonna lose out, or perhaps when another greasy dive opens up next to an established one. BOO-HOO HOO. This is called competition in business. It’s been around forever. Imagine if there was only ONE investment firm, because they screamed and cried, kicking their feet because their profits were declining.
    And as usual, the one that throws the bigger temper tantrum is the one that will win the attention.

    • KE

      Well said!

  • rick

    Keep in mind that the new casino is also cannablizing revenue from WISCONSIN AND INDIANA and bringing it right here to Illinois-you see it from all the out of state casino billboards popping up and the media blitz on TV and radio.

    Your spot on Kevin-the existing casinos can get more creative to keep luring customers back-also more people local to each casino may visit more often if they don’t have to fight the crowds-I live near O’hare and would seldom get the urge to drive out to Elgin or Aurora but might check out the new Rivers Casino every now and then

    • KE

      THANKFULLY The Rivers casino is keeping Illinois residents and their money here in Illinois.

      Been there twice so far –.more for the restaurants than the gambling —.but both times our group dropped a bunch of money and we liked that we did NOT have to drive much to do it.

  • Fast_ed

    Only so much gambling revenue in a given area, no matter how many casinos are built. The proof is in the numbers.

  • Lil' Sir Echo

    Eddie Underscore said it. In this Zero Sum Game, there aren’t enough chumps to go around. Despite what you see on a daily basis.

  • John A

    Like to know how a city like Joliet (not a major hub, etc)can have two casinos within a 10 minute drvie from each other -The real story not some population report. Harrah’s has the better poker room by the way.

  • RJ

    Rivers doesn’t payout.

    It’ll be back to normal as soon as people realize this…

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