GAMBLING A WINDFALL FOR SOME RIVER CITIES; ILLINOS BOATS HELP BOLSTER MUNICIPAL COFFERS

Financially strapped cities constantly seek ways to bolster their coffers, whether by cutting expenses or pushing for higher taxes. In rare cases, new industry might move to the area, providing jobs and hope for recovery.

But few officials in Alton a city of about 34,000 people, situated across the Mississippi River from St. Louis predicted the windfall generated by riverboat gambling.

"Before riverboat gambling, we had such cash flow problems that there was a question as to whether we could make payroll," said Comptroller Laverne Hill. "But we have gone from an $800,000 deficit in the budget the year prior to riverboat gambling, to having, next year, about a $3 million reserve.

"It's been very good for the city of Alton."

The Alton Belle began operating in September 1991. By late this spring or early summer, the Belle will be replaced by a new 1,400-passenger boat.

Like other Illinois gambling boats, the Alton Belle, since the day it opened, has been profitable ... for its owners as well as the state and city.

Last month, total adjusted gross receipts were more than $4.3 million, with $281,000 going to the city of Alton. Since January, the boat has grossed $37.3 million and the city has reaped $2.46 million of the profits.

Other Illinois cities with riverboats reported even greater earnings.

Par-A-Dice in East Peoria, for example, has grossed $41.1 million this year; Casino Rock Island, $25.9 million; Joliet Empress, $119.5 million; and Jo Daviess Silver Eagle, $22.8 million. Local revenues have totaled $2.9 million, $1.9 million, $7.4 million and $1.8 million respectively.

The state's newest riverboat gambling site Players Casino at Metropolis garnered more than $4 million in its first full month of operation, $302,000 of which went to the city of Metropolis.

Officials in those Illinois cities relate stories similar to Alton's.

"We're averaging around 5,000 people a day now," said Metropolis Mayor Bill Kommer. "In May, June, July and August, we might have 7,000 or so. So far it looks like it will be a good thing for the city."

Lori Fleming, Peoria's finance director, said: "We used our money in our budget for a new police station. We were able to reduce our borrowing, and we're now using it for debt service."

Bill McFadden, chairman of the Jo Daviess County Board, added: "We've got people that were totally against it before who, now that the money has started to come in, think it's great."

In each city, the revenue from riverboat gambling is earmarked differently. In Alton, for example, the city was able to develop a master plan for the entire riverfront.

City Planner Phil Roggio said the idea was to link together all the city's riverfront facilities in terms of planning and infrastructure improvements.

"We're currently negotiating what will be a project to build a 300-foot marina down by the new bridge," he said.

Roggio said the riverfront park was rarely used prior to the riverboat, but now is a growing and prosperous part of town.

McFadden said that the Jo Daviess Silver Eagle is the only Illinois riverboat that has local revenue going to a county.

He said 80 percent of the money will go toward providing sewers and water to the riverboat site, about two miles south and east of Dubuque, Iowa. The county plans to spend the remaining portion of the local share on economic development.

Already a frozen food processing plant has located there, add~ing 100 new jobs, and McFadden said another industry has committed to the site. The riverboat itself employs 400-500 people, he added.

"Our theory up here is to use it for economic development," he said. "We feel that sooner or later this is going to kind of taper off, and rather than put it into something that taxpayers will have to pick up the tab for, we want to invest it in ways that will benefit the county in years to come."

Is riverboat gambling the answer for cities struggling with insufficient finances? Does Illinois' success with the venture indicate it also would pay off in Missouri?

Maybe not. Although it's not finalized, the Missouri riverboat gambling law likely will divide receipts differently than does Illinois.

Like Illinois, about 20 percent of the Missouri riverboats' adjusted gross receipts less payouts to customers will go to the state.

But only 2 percent of the adjusted gross receipts, in addition to $1 per admission, will go to the local government. In Illinois, the local share is 5 percent of the adjusted gross receipts plus $1 per admission.

In other words, the $302,000 in revenue for Metropolis last month, would amount to about $238,000 in Cape Girardeau.

Also unlike Illinois, Missouri law will cap gambling losses. Similar measures have been blamed for the demise of Iowa's riverboats once the boats in Illinois began operating.

Regardless, there's little doubt the venture at least has the potential to generate income for state and local governments.

Cape Girardeau City Manager J. Ronald Fischer said the city could pave a lot of streets and make other needed capital improvements with the extra money.

Cape Girardeau voters will consider June 8 whether to approve riverboat gambling in the city. Should the measure pass, and a company bring a boat to the city, Fischer said it wouldn't be hard to find ways to spend the revenue.

"One of first things the council would want to look at is our five-year capital improvements, and take those projects and put them on an accelerated schedule," Fischer said.

The city manager said the city would be able to complete a long-awaited project to segregate combined storm and sanitary sewers in an older part of the city. Some riverboat revenue also could be earmarked for riverfront development in the city, he added.

But the matter likely will be contentious, and Fischer said that until a "reputable company" offers to bring a riverboat here, the issue essentially is moot.

"I'm not sitting here and saying that I think Cape Girardeau ought to approve riverboat gambling when there's no one at this time that's shown an interest," he said.

"If a reputable company comes to us and says they want to locate in Cape Girardeau, then I think it's an issue for people to look at."

Riverboat gambling also was controversial in Illinois cities.

McFadden said there was a lot of opposition to gambling among residents in the rolling farm country of northwestern Illinois.

He said a citizens group expressed concerns about organized crime moving into the area, that gambling would hurt the economy by draining funds from other goods and services, and that social problems associated with gambling would rise.

"Of all the issues that were brought up, the fact that there's only a two-lane highway to the site is the only one we've been able to verify," McFadden said.